Powerful countries compete for AI resources, with precious metals and rare earths becoming new investment focal points

The two major powers, the United States and China, are competing for the raw materials needed to develop artificial intelligence: precious metals and rare earth elements. Analysts point out that benefiting from scarcity, precious metals and commodities are becoming new trends in the investment market.

High demand for artificial intelligence drives up precious metal prices

The rapid expansion of AI infrastructure has clearly reflected in the price trends of core commodities. Metals such as copper, aluminum, lithium, cobalt, and silicon, due to their widespread use in data centers, power grids, chips, and energy storage systems, are regarded as essential inputs for AI development. Market expectations are that the demand for these metals will grow to three times the current level by 2030. On the other hand, precious metals like gold, silver, platinum, and palladium not only serve as hedges but also play roles in semiconductors and high-end manufacturing processes. CNBC market analysis believes that prices of precious metals will continue to hit new highs.

Why does the US insist on Greenland and “take over” Venezuela?

When political situations are turbulent, precious metals are often seen as safe havens for investors. Besides, precious metals are crucial for building AI. When geopolitical conflicts frequently occur, superpowers like the US may take bold actions to secure access to rare earth resources. Other countries must also defend their domestic rare assets to succeed in the AI race.

Current political focal points happen to be regions rich in key minerals. Greenland possesses important minerals needed for advanced AI chips, Venezuela has oil; Ukraine holds Europe’s largest lithium reserves and major titanium resources globally; Russia has long focused on the mineral-rich Arctic region. China, through the “Lithium Triangle” in Chile, Argentina, and Bolivia, has established influence and controls about 70% of global lithium processing capacity. These countries are focal points in the US-China rivalry; whoever gains control over these nations can access abundant rare earth elements.

Who controls rare earths, controls the future

This battle for rare earths is undoubtedly a race that Western countries must win to secure dominance in future AI deployment. Whether strengthening defense capabilities or building infrastructure, the ultimate key lies in possessing advanced AI technology and critical rare earth elements.

Why are commodities becoming a focus in the investment market?

Analysts point out that control over rare earth resources will become a major driver of future market volatility. Large fluctuations could become the new normal in the stock market. Therefore, investors should closely monitor geopolitical developments to predict market trends. Many lesser-known commodities, such as gallium and germanium, are gradually gaining market attention. These industrial metals are critical materials for semiconductors, AI chips, fiber optic systems, and military and night vision equipment, vital for AI technology development. Due to their scarcity, future demand may surpass supply. Therefore, allocating investments in related ETFs and mutual funds is a strategy worth considering.

This article “Great Powers Compete for AI Resources, Precious Metals, Rare Earths, and Commodities Become New Investment Focus” first appeared on Chain News ABMedia.