Copper prices are on a tear, surging toward the $12,000 mark as a perfect storm of supply disruptions and frantic artificial intelligence (AI) demand creates what analysts are calling a "highly irregular" market distortion. According to OilPrice.com, the red metal is currently trading near record highs, touching $11,952 per ton on the London Metal Exchange (LME) last Friday.
Citi analysts have aggressively revised their forecasts upward, predicting that copper could hit $12,000 per ton in the coming months. The bank cited a combination of supply chain chaos and the insatiable appetite of the AI industry as key drivers behind the price surge. "The AI sector's voracious need for copper, a critical component in advanced computing hardware, has created a supply crunch that the market is struggling to keep up with," said Citi's lead commodities strategist, Aisha Javed.
The AI-Fueled Chip Shortage Threatens Smartphone Affordability
But the AI-driven copper boom is not without its consequences. CNBC reported that the chip shortage fueled by the AI industry's demand could lead to a 6.9% rise in the average selling price of smartphones in 2026, according to new research from Counterpoint.
"The ready availability of clients means companies that provide the compute just need to make sure their finances are in order," said CNBC's daily market update. "But the chip shortage, exacerbated by the AI boom, is set to weigh on consumer electronics like smartphones."
U.S. Halts UK Tech Trade Deal Negotiations
In another development, the Financial Times reported that the United States has halted negotiations on a "technology prosperity deal" with the United Kingdom. The deal was aimed at increasing collaboration between the two countries on advanced technologies like AI, nuclear fusion, and quantum computing.
According to the FT, the decision to pause the negotiations comes amid growing tensions between the U.S. and its allies over the regulation of emerging technologies. "The move underscores the Biden administration's concerns about the national security implications of these critical technologies," said FT's senior technology correspondent, Sarah O'Connor.
TotalEnergies Secures Renewable Energy Deal with Google
On a more positive note, French oil and gas giant TotalEnergies announced a 21-year power purchase agreement (PPA) to supply renewable energy to Google's data centers in Malaysia. The deal will see TotalEnergies provide 1 TWh, or 20 MW, of certified renewable power from its Citra Energies solar plant in the northern Kedah province.
"This new agreement with Google reinforces TotalEnergies' position as a major player in the renewable energy market and its commitment to supporting the energy transition of hyperscalers," said TotalEnergies' CEO, Patrick Pouyanné, in a statement.
Looking Ahead: Navigating the AI-Driven Commodity Boom
As the AI revolution continues to reshape global industries, the energy and technology sectors will be at the forefront of the transformation. Investors and policymakers will need to closely monitor the ripple effects of the AI-fueled commodity boom, from rising smartphone prices to geopolitical tensions over critical technology.
The coming year is likely to bring more volatility and disruption, but also opportunities for companies and countries that can navigate the complex landscape of AI, energy, and global trade. Energy Standard will continue to provide in-depth coverage and analysis to help our readers stay ahead of the curve.
Reporting based on coverage from OilPrice.com, CNBC, and the Financial Times, December 15-16, 2025.