AI Emerges as New Driver of Rare Earth Demand, Boosting Supply Chain Restructuring Efforts

Published: Jul 24, 2026 18:55

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Sprott Asset Management’s research suggests that Western countries are investing billions of dollars to restructure supply chains to meet rare earth demand from national defense and clean energy, but artificial intelligence (AI) is unexpectedly becoming a new driver of rare earth demand growth. The Toronto-based investment management firm said AI has now joined national defense and electrification as the third driver of rare earth demand growth, with the world’s top five hyperscale data center operators alone having pledged to invest $400 billion in 2025.

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