AI and military spending to drive 50% copper demand surge by 2040

Thursday 08 January 2026 - 12:50

By: Dakir Madiha

AI and military spending to drive 50% copper demand surge by 2040

Artificial intelligence expansion and soaring defense budgets will propel global copper demand up 50 percent by 2040, risking severe shortages that could hinder economic growth and technological progress, according to a study released Thursday by S&P Global.

Annual copper demand will hit 42 million metric tons by 2040, up from 28 million metric tons in 2025, the consultancy forecasts. Without major advances in recycling and new mining projects, over 10 million metric tons of yearly demand nearly a quarter could go unmet, the report warns.

AI data center boom fuels unprecedented metal consumption, with hyperscale AI facilities requiring up to 50,000 tons of copper each. More than 100 new data center projects worth nearly $61 billion were announced last year, per Reuters. By 2030, these could devour 330,000 to 420,000 metric tons of copper annually. "The underlying demand driver here is world electrification, and copper is the metal of electrification," S&P Global Vice President Daniel Yergin, a report co-author, told Reuters. The study updates S&P's 2022 copper analysis with a new methodology that projects demand growth regardless of government climate policies.

Defense modernization adds further strain. Global military copper demand should reach 4.22 million metric tons per year in 2026, growing 14 to 18 percent annually as nations bolster capabilities. Each F-35 fighter jet packs about 1,200 pounds of copper in wiring, electronics, and weapons systems. "Copper demand is truly inelastic in the defense sector," said S&P Vice President Carlos Pascual, former U.S. ambassador to Ukraine.

Supply tightens amid mining disruptions and structural limits. Freeport-McMoRan slashed its 2026 production target for Indonesia's Grasberg mine after a fatal accident, dropping to 478,000 metric tons from 700,000 previously expected. BHP plans $5-6 billion investment in Chile's Escondida mine, yet output faces a 20 percent decline regardless. New copper mines average 16 years from discovery to full production worldwide, and 29 years in the U.S. Project approvals have averaged under 300,000 tons yearly over the past three years—half the 600,000-700,000 tons needed annually to match demand growth.