This analysis examines the "Moderate AI" scenario for copper markets through 2030, where full Stargate deployment creates a 4.3M tons/year deficit, new mine lead times stretch to 18 years, and the U.S. invokes the Defense Production Act to secure critical materials. Under this scenario, copper prices are projected to reach $40/lb by 2030.
The Moderate AI scenario represents our mid-range projection for AI-driven copper demand growth. It assumes full deployment of announced AI infrastructure projects, extended mine development timelines due to permitting challenges, and government intervention to secure critical materials. This scenario is considered "moderate" as it reflects the full implementation of publicly announced AI initiatives without assuming additional unannounced projects.
The Moderate AI scenario represents what we believe is the most likely outcome based on current deployment plans and regulatory trends. The resulting supply-demand imbalance would fundamentally transform copper from an industrial metal to a strategic resource, with prices reflecting its critical role in enabling AI infrastructure.
— Critical Materials Strategy Report, 2025
Under these assumptions, we project copper prices to follow a steep upward trajectory, reaching approximately $40/lb by 2030—a nearly 10x increase from 2023 levels that would place significant strain on technology deployment plans and trigger unprecedented government intervention in copper markets.
The primary driver of increased copper demand in this scenario is the full implementation of the Stargate initiative—a coordinated effort by major technology companies to deploy next-generation AI infrastructure globally. Announced in late 2023, Stargate targets the deployment of 334 GW of AI-optimized data center capacity by 2030.
The Moderate AI scenario assumes that Stargate deployment proceeds according to announced timelines, with 85% of capacity online by 2030. This represents a significant acceleration from historical data center deployment rates, driven by intense competition in AI capabilities and substantial capital commitments from major technology firms.
The copper intensity of AI data centers continues to increase in this scenario, driven by several factors:
The copper intensity of AI infrastructure is not static—it's increasing with each generation as power densities rise and cooling requirements become more demanding. Latest AI-optimized data centers use nearly 40% more copper per MW than facilities built just three years ago.
— Cloud Infrastructure Quarterly Report, 2024
A critical factor in the Moderate AI scenario is the extension of mine development timelines from an historical average of 12-14 years to 18+ years. This extension is driven by several factors that collectively constrain the supply response to higher copper prices.
The extended timeline means that even with copper prices projected to reach $40/lb by 2030, new mine supply initiated in response to price signals today would not reach production until the 2040s. This creates a prolonged period of structural deficit that cannot be resolved through traditional market mechanisms.
Our analysis of the current project pipeline indicates that even with all currently planned projects reaching production (an optimistic assumption), new mine supply would add only 2.1 million tons annually by 2030—less than half of the projected demand increase from AI infrastructure alone.
A key feature of the Moderate AI scenario is the invocation of the Defense Production Act (DPA) by the United States government to secure copper supplies for critical infrastructure. This represents a significant shift in how copper is viewed—from a standard commodity to a strategic resource essential for national security and technological leadership.
The invocation of the DPA for copper would follow the pattern established for rare earth elements and battery materials, but with broader implications given copper's ubiquity in modern infrastructure. Under DPA authorities, the government could:
The application of the Defense Production Act to copper would represent a fundamental shift in how critical materials are managed. It acknowledges that market mechanisms alone cannot resolve the structural deficit created by AI infrastructure deployment on the timeline required for national competitiveness.
— U.S. Department of Defense, Strategic Materials Assessment, 2024
Similar interventions are expected from other major economies, including the European Union's Critical Raw Materials Act and China's strategic stockpiling program. These parallel interventions would further fragment the global copper market along geopolitical lines, with different price regimes emerging for allied vs. non-allied supply chains.
The combination of accelerated AI-driven demand growth and constrained supply response creates a substantial and persistent deficit in the Moderate AI scenario. This structural imbalance drives the projected price appreciation to $40/lb by 2030.
The cumulative deficit over the 2024-2030 period reaches approximately 51 million tons—equivalent to more than two years of global copper production at current rates. This deficit cannot be resolved through traditional market mechanisms and will require a combination of:
In the Moderate AI scenario, recycling provides approximately 28% of total copper supply by 2030—down from the historical average of 30-32%. This relative decline occurs despite significant absolute growth in recycling volumes, as primary demand growth outpaces recycling capacity expansion.
| Factor | Current Status | 2030 Projection | Limiting Constraints |
|---|---|---|---|
| Collection Rate | 68% of available scrap | 78% of available scrap | Infrastructure investment, consumer behavior |
| Processing Capacity | 4.8M tons/year | 7.2M tons/year | Capital investment, permitting timelines |
| Energy Requirements | 20-30% of primary production | 15-25% of primary production | Technology improvements, renewable integration |
| Quality Specifications | Variable by application | Increasingly stringent | AI applications requiring higher purity |
| Scrap Availability | Limited by historical consumption | Increasing but lagging demand | Product lifespans of 15-30+ years |
The fundamental challenge for recycling in the Moderate AI scenario is the mismatch between the rapid acceleration of demand and the inherent constraints on recycling growth:
Recycling is a critical component of the copper supply chain, but it cannot scale at the pace required by AI-driven demand growth. The fundamental constraint is not technology or economics but time—the copper being installed today won't be available for recycling until the 2040s and beyond.
— Global Copper Recycling Association, Annual Outlook, 2025
Government mandates for increased recycling are expected to accelerate in the Moderate AI scenario, with the U.S. and EU likely to implement minimum recycled content requirements for government-funded projects and tax incentives for recycling infrastructure investment. However, these policy interventions cannot overcome the fundamental time lag between consumption and scrap availability.
The Moderate AI scenario has significant implications for the TCu29 token and its role in the copper market. As copper prices rise and physical availability becomes constrained, TCu29's function evolves from a simple store of value to a mechanism for securing priority access to physical copper.
In the Moderate AI scenario, TCu29 would likely trade at a premium to spot copper prices, reflecting its role in securing priority access to physical metal. This premium would increase as physical copper becomes subject to allocation mechanisms and export restrictions.
As copper transitions from a commodity to a strategic resource, TCu29 offers a unique value proposition—combining the liquidity of a digital asset with the security of physical backing and the strategic advantage of priority access. This combination becomes increasingly valuable as traditional supply chains fragment along geopolitical lines.
The Moderate AI scenario represents both a challenge and an opportunity for TCu29. While the physical copper backing the token would become more valuable, the mechanisms for ensuring redemption would need to adapt to a market environment characterized by government intervention and strategic allocation. TCu29's governance structure provides the flexibility to navigate these changes while maintaining its core value proposition of physical backing and priority access.