Rising Demand for Copper Driven by AI-Powered Data Centers
The demand for copper is going up because of AI technology being used in big data centers. The AI industry needs a lot of power, which is why copper prices could get much higher. Already, copper prices have gone up by 20% since the start of this year. This is because data centers need a lot of copper to support AI. Bank of America analysts think that by the end of this year, there might not be enough copper to meet the demand, partly because of issues with production in China and the big demand for copper around the world.
Impacts on the Copper Market
The COVID-19 pandemic caused copper prices to double. Copper is used to make electrical wires and is getting more popular due to electric cars and AI projects. In early 2022, copper prices went down because of higher loan interest rates, but later rose again due to increased demand for AI technology. Experts predict that copper prices will continue to rise and could reach $5.44 per pound by 2026.
Global Outlook and Challenges Ahead
By 2026, data centers, AI, and cryptocurrency are expected to double their electricity usage, which could strain the world’s electrical grids. This high demand for energy is posing sustainability and grid upgrade challenges. The requirement for copper, a crucial resource in renewable energy solutions, is also increasing. China, a significant player in the global copper market, could significantly influence future price trends. The development of AI is closely linked to the demand for copper and other resources. To understand their impact on the global market, it is essential to stay informed about these changes.
Original article: “AIs Thirst for Data Center Power Feeds Renewed Demand for Copper” https://www.investopedia.com/ai-thirst-for-data-center-power-feeds-renewed-demand-for-copper-8646160
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