Emerging Supply Constraints in AI and Copper Demand
Global macro investing expert Eric Fry highlights critical supply bottlenecks affecting the AI sector, particularly in raw materials like copper and memory chips. As the demand for copper is projected to rise approximately 50% by 2040, driven by the AI boom, energy systems, and electric vehicles, the industry faces challenges in meeting this heightened demand due to a lack of new deposits. In fact, estimates suggest that we may need to extract as much copper in the next two decades as has been mined throughout the last 10,000 years combined.
Goldman Sachs forecasts a 50% increase in global power demand from data centers by 2027, further stressing the importance of addressing supply constraints. This emerging scenario suggests a shift in investment focus towards companies that can supply critical materials, as major tech companies like Microsoft, Apple, Amazon, Meta, and Alphabet prepare to report earnings in late April 2023. Investors are advised to be vigilant as these firms may disclose significant supply limitations impacting their growth outlook.
