AI and Defence Set to Drive Global Copper Demand 50% Higher by 2040
Global Copper Demand Set to Rise 50% by 2040 as AI and Defence Growth Outpaces Supply
Rapid growth in artificial intelligence and defence industries is expected to push global copper demand up by 50% by 2040, while supply is projected to fall short by more than 10 million metric tons per year without significant expansion in mining and recycling, according to a new report by S&P Global.
Copper remains a critical industrial metal due to its high electrical conductivity, corrosion resistance and ease of fabrication. It is widely used across construction, transportation, electronics and technology sectors, making it central to global electrification efforts.
While electric vehicle adoption has driven increased copper consumption over the past decade, emerging demand from artificial intelligence, defence and robotics is expected to accelerate usage even further over the next 14 years.
This growth will come on top of sustained consumer demand for appliances such as air conditioners and other copper-intensive products.
The report forecasts global copper demand will reach 42 million metric tons annually by 2040, up from approximately 28 million metric tons in 2025. Without new sources of supply, nearly one-quarter of projected demand could remain unmet, creating a substantial supply gap.
Electrification remains the dominant driver behind this trend. Copper plays a central role in power generation, transmission and energy-intensive technologies, making it indispensable as economies modernise and digitise.
Artificial intelligence is emerging as a particularly strong source of demand, driven by the rapid expansion of data centres. More than 100 new data centre projects were announced last year, with combined investments approaching US$61 billion, significantly increasing copper requirements for power infrastructure and cooling systems.
Geopolitical developments are also contributing to rising demand. The conflict in Ukraine and increased defence spending by countries including Japan and Germany are expected to boost copper consumption, particularly for military hardware and advanced electronics, where demand tends to be less sensitive to price fluctuations.
Currently, Chile and Peru are the world’s largest copper producers, while China dominates global copper smelting. The United States imports roughly half of its copper requirements each year and has imposed tariffs on certain copper products, adding further complexity to global supply chains.
The report does not include potential supply contributions from deep-sea mining. Unlike previous analyses, including a 2022 S&P study focused on achieving global carbon neutrality by 2050, the latest report uses a base-case scenario that assumes copper demand will continue to rise regardless of climate policy outcomes.
According to S&P Global, shifting political dynamics around the energy transition have reinforced the view that copper demand growth will remain robust, driven by structural trends in electrification, digitalisation and global security priorities.
