ChatGPT, a leading AI platform, is revolutionizing the energy landscape by making copper the new oil. According to Goldman Sachs, the electricity consumption required for ChatGPT is ten times that of a Google search. This surge in electricity demand is driven by the rapid expansion of data centers powering AI technologies like ChatGPT, with projections indicating a 2.4% rise in electricity demand from 2022 to 2030.
The Electric Power Research Institute estimates that data centers could consume up to 9% of US electricity generation by 2030, highlighting the substantial impact of AI platforms on energy consumption. With over 180 million users, ChatGPT alone showcases the massive electricity requirements of AI technologies, emphasizing the need for additional data center capacity to meet growing demand.
As the US energy grid undergoes significant transformations, natural gas is expected to play a crucial role in meeting the escalating demand from AI and data centers. Analysts project a 60% growth in natural gas supply to support the energy needs of these emerging technologies, with renewables contributing the remaining 40%.
However, the energy transition also underscores the critical importance of copper, a vital mineral essential for AI technologies and clean energy applications like electric vehicles, solar panels, and wind turbines. The demand for copper is projected to increase exponentially, with challenges in meeting supply requirements due to declining ore quality and rising costs.
The soaring demand for copper has already driven prices up by nearly 25% this year, reaching record highs. This trend reflects the long-term demand forecasts for copper and the constraints on its supply, positioning copper as a highly attractive commodity for investors seeking to capitalize on the energy transition.
Investors are presented with unique opportunities in natural gas and copper markets as the energy landscape evolves. Natural gas prices are expected to rebound, offering potential returns for investors, while copper’s indispensable role in the energy transition makes it a compelling investment option for those looking to benefit from the mineral’s long-term demand viability.
Frank Holmes, CEO of US Global Investors Inc., emphasizes the significance of natural gas and copper in the evolving energy sector. With natural gas poised for growth and copper’s essentiality in clean energy technologies, investors are advised to consider these assets to align with the changing dynamics of the energy market.