13 Nov 2026
Which Critical Minerals Does AI Depend On?
AI depends on a long list of minerals: copper for power grids and data center wiring, gallium and germanium for chips and optical components, rare earth elements for motors and magnets, tungsten and tantalum for electronics, and silicon, aluminum and steel for nearly everything else. Supply of several of these is concentrated in a single country, particularly at the refining stage, and export controls have tightened since 2023. The International Energy Agency’s 2026 outlook described mineral supply risk as an immediate economic concern rather than a distant one.
Why does AI need minerals?
AI is often described in terms of software and chips, but the physical buildout behind it is material intensive. Data centers need copper for power distribution, busbars and cabling; aluminum and steel for buildings and racks; and large volumes of specialized metals inside servers. The power plants, transmission lines and transformers that supply data centers add more copper, steel and electrical steel. Chips themselves use small quantities of many elements, but those elements are often hard to substitute.
Which minerals matter most?
Copper. The core metal of electrical systems. Grid expansion, data centers and electrification all add demand. The IEA has projected that copper demand rises by roughly 7 million tonnes by 2040 under its scenarios, driven by electricity networks and new technologies, including data centers.1
Gallium. Used in compound semiconductors for power electronics, radio frequency chips and some lasers. It is mostly recovered as a byproduct of aluminum and zinc processing.1
Germanium. Used in fiber optics, infrared optics and some semiconductors. It is recovered mainly from zinc processing and coal ash.1
Rare earth elements. Neodymium, praseodymium, dysprosium and terbium make the permanent magnets in motors, cooling fans, hard drives, robots and wind turbines.
Tungsten and tantalum. Tungsten is used in chipmaking and in defense applications; tantalum is used in capacitors throughout electronics.
High-purity silicon and quartz. The starting materials for semiconductor wafers.
Where is supply concentrated?
Mining for some minerals is spread across many countries, but refining and processing are often concentrated. The IEA reported that for gallium, graphite, manganese and rare earths, the top refiner, China, accounted for more than 90% of global supply.2 The agency’s 2026 outlook identified gallium, magnet rare earths, yttrium, graphite, tungsten, germanium, tellurium and cobalt as having some of the highest risk exposure scores, based on concentration, substitutability and strategic use.1
How have export controls changed the picture?
In December 2024, China restricted exports of gallium, germanium and antimony to the United States.3 Controls on other minerals and processing technologies followed. The IEA reported in July 2026 that prices of several strategic minor minerals more than doubled between January 2025 and April 2026, with tungsten prices rising about sixfold, and that export controls had created sharp price differences between Chinese and other markets.4 The agency estimated that if China’s export controls were fully implemented, about $6.5 trillion in annual production outside China could be at risk.2
Why is refining the pressure point?
Mined ore is not usable on its own. It must be concentrated, refined and often converted into chemicals, alloys or high-purity materials before manufacturers can use it. Refining requires specialized plants, technical know-how and, in some cases, processes that generate hazardous waste, which makes new facilities slow and costly to build. A country can therefore mine a mineral and still depend on another country to process it. For many minor minerals used in chips, a single refining hub handles most of the world’s supply, so a policy change there can reach manufacturers everywhere within months.
How are governments responding?
Governments have turned to stockpiles, price floors, offtake agreements, grants, loans and equity stakes to support mining and refining outside concentrated supply regions. The FY2027 U.S. defense budget request included about $48.8 billion to address critical mineral shortfalls and domestic supply chains through programs including the National Defense Stockpile and the Defense Production Act.5 Allies have pursued similar programs, and trade agreements increasingly include mineral provisions.
New supply still takes time. Mines can take a decade or more from discovery to production, and new refineries face permitting, financing and technical hurdles. The IEA has also noted that price volatility created by export controls can deter private investment, because projects must remain viable if prices fall back.1
What does this mean for investors?
Critical minerals connect AI to mining, refining, chemicals and recycling companies. Exposure can come through diversified miners, single-commodity producers, refiners, developers of new projects and companies that recycle metals from electronics. Risks are significant: commodity prices are volatile, early-stage projects may never reach production, policies can change quickly, and some producers operate in jurisdictions with political or environmental risks. Our articles on commodity ETFs, the semiconductor supply chain and the AI supply chain from chips to power provide related context.
Frequently asked questions
What makes a mineral “critical”?
Governments define critical minerals based on how important they are to the economy or national security and how vulnerable their supply is to disruption. The U.S. Geological Survey publishes a list for the United States, and other countries and the IEA use similar assessments. A mineral can be critical even if it is used in small quantities, as long as it is hard to replace.
How much copper does a data center use?
It varies with size and design. Data centers use copper in power distribution equipment, busbars, cabling, grounding, transformers and cooling systems. The larger copper demand linked to AI often comes from outside the building, in the transmission lines, substations and power plants needed to supply it. Estimates differ widely, so investors should treat any single per-megawatt figure with caution.
Why are gallium and germanium important for AI?
Gallium is used in compound semiconductors such as gallium nitride and gallium arsenide, which appear in power electronics, radio frequency chips and some lasers used in optical networking. Germanium is used in fiber optics and some semiconductor processes. Both are produced mainly as byproducts of other metals, which makes it hard to increase supply quickly when demand rises.
Can recycling reduce dependence on mined minerals?
Recycling helps, particularly for copper, aluminum and some precious metals, which already have established recycling markets. For many minor minerals used in electronics, quantities per device are small and recovery is technically difficult, so recycled supply remains limited. Over time, collection systems, new processing methods and policy incentives may raise recycled shares.
Do export controls affect prices outside China?
Yes. When a dominant supplier restricts exports, buyers elsewhere compete for limited alternative supply, which can raise prices outside the restricting country. The IEA reported in 2026 that export controls had created sharp price divergences between Chinese markets and other regions for several minerals. Prices can also fall quickly if controls are eased or new supply arrives, which adds to the volatility producers face.
How do thematic ETFs provide critical mineral exposure?
Some thematic ETFs focus on mining or on specific minerals such as copper, lithium, uranium or rare earths. Others include miners and refiners within broader energy transition, infrastructure or defense themes. Holdings often include companies at different stages, from producers to explorers. Reviewing a fund’s methodology and holdings shows its mix of commodities, regions and company sizes.
- International Energy Agency, “Global Critical Minerals Outlook 2026,” Outlook chapter, July 2026, and coverage by Model Diplomat, July 2026.
- International Energy Agency, “Global Critical Minerals Outlook 2026,” July 16, 2026, as reported by Anadolu Agency.
- International Energy Agency, “Global Critical Minerals Outlook 2025,” Executive Summary, 2025.
- International Energy Agency, “Global Critical Minerals Outlook 2026,” Executive Summary, July 2026.
- Greenberg Traurig, “Understanding the President’s FY 2027 Budget Request for the Department of War,” May 2026, as published by The National Law Review.
Cite this page: Adam Patti, "Which Critical Minerals Does AI Depend On?," VistaShares, updated November 13, 2026, https://www.vistashares.com/critical-minerals-behind-ai/. Plain-text version.
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