Barclays believes that capital expenditure by cloud service providers will exceed USD 2.5 trillion over the next five years, with copper demand being particularly prominent. Mineral-exporting countries such as Chile, Peru, and the Democratic Republic of the Congo (DRC) are set to experience a multi-year investment boom. The current rise in copper prices, decoupled from weak oil prices, creates additional benefits for countries that import oil but export metals. We are currently in the early stages of a commodities supercycle, with the Chilean peso, Peruvian sol, and Australian dollar showing the greatest appreciation potential.
Barclays believes that the surge in AI investment is fueling a supercycle in global commodities, representing significant opportunities for investors.
According to TradingView, on November 19, Barclays Research published a report stating that as AI infrastructure continues to upgrade, demand for specific minerals and rare earth elements will surge sharply, bringing years of investment cycle benefits to mineral-exporting countries.
The report emphasizes that among all commodities driven by AI, copper demand stands out the most. Mineral-exporting countries such as Chile, Peru, the Democratic Republic of Congo, and Australia are set to experience years of investment boom, with corresponding sovereign currency exchange rates expected to strengthen.
(Left: Copper miners will benefit the most; Right: Mineral-exporting countries will also benefit from the AI investment wave)
Barclays pointed out that the rare phenomenon of rising copper prices alongside weak oil prices presents a significant improvement in trade conditions for countries that import oil but export metals (such as Chile and Peru), providing additional support for their currencies.
AI investment drives explosive growth in commodity demand
The pace of AI infrastructure construction determines the speed of technological progress, and this process heavily relies on specific minerals and rare earth elements, making commodities an increasingly critical focus.
The report estimates that capital expenditures by hyperscale cloud service providers alone will exceed USD 2.5 trillion over the next five years. Analysts believe this figure might even be underestimated, as estimation data typically lags and does not include non-hyperscale enterprises and private companies.
Commodities related to energy, electricity, electrical infrastructure, cooling and heat dissipation management, semiconductors and hardware inputs, as well as construction materials for data centers, will all benefit from this round of AI investment cycle.
Copper is the most prominent beneficiary, followed closely by silicon, with rare earth elements, battery metals (lithium, cobalt, nickel), platinum group metals, and aluminum following thereafter.
According to the International Energy Agency (IEA) 2025 Critical Metals Outlook report, approximately $500 billion to $600 billion in new investments will be required over the next 15 years just for copper, lithium, nickel, and cobalt to meet current projected demand, with copper accounting for half of the capital expenditure needs.
Similar to AI capital expenditures, these figures may also be underestimated, especially the demand for copper.
GPU/AI chips depreciate relatively quickly, and considering the pace of technological advancements, this process may accelerate further. The same applies to power and cooling systems, where replacement demand will lead to ongoing, incremental substitution needs rather than just one-time construction demands.
Mineral exporting countries enter a multi-year investment cycle
Barclays believes that in this computational arms race, mineral exporting countries at the upstream end of the supply chain are in the 'sweet spot.'
From the perspective of copper mining, Chile, Peru, and the Democratic Republic of Congo (DRC) are in the most advantageous positions.
Chile, in particular, not only stands as the largest copper mining country but has also seen a rebound in mining investments over the past two years, with commitments for future projects on the rise. Argentina, with its vast untapped reserves, is also poised to join this club.
In terms of raw material exports for other minerals and rare earth elements, Australia, Indonesia, and Brazil will also benefit significantly.
Notably, although mineral extraction is distributed globally, China dominates the refining sector, processing nearly 50% of the world’s refined minerals. This pattern is unlikely to change in the short term, indicating that global trade ties with China will remain strong.
Lessons from Historical Commodity Boom Cycles
Barclays reviewed the commodity booms led by China in the early 21st century (2002-2007 and 2010-2014), revealing several key patterns based on historical experience.
First, there was a significant increase in gross fixed capital formation in commodity-exporting countries, which became a major contributor to GDP growth. During this period, prices for copper, steel, and oil increased over 300% in the first phase, while iron ore and aluminum saw more modest but still substantial gains.
(In commodity boom cycles, investment has been a critical driver of economic growth.)Second, overall trade balances improved. In the early stages of the cycle, despite rising imports of capital goods driven by investment, robust export growth was sufficient to offset these increases and significantly improve trade balances. Countries with high mining exports, such as Peru and Chile, experienced the most pronounced improvements.
(Countries with higher shares of mining product exports showed the most significant economic performance improvements.)Data also indicate a clear positive correlation between high export growth and real effective exchange rate (REER) appreciation in the following year, with this correlation being stronger during commodity bull markets.
(Export growth shows a positive correlation with the rise in the real effective exchange rate.)The decoupling of copper and oil prices creates additional opportunities.
One of the most significant and distinctive features of this cycle is the decoupling of copper and oil prices.
Traditionally, as indicators reflecting the state of the global economy, copper and oil prices have shown a high degree of correlation. However, in recent years, this link has broken due to increased oil supply from non-OPEC countries such as the United States and Brazil, as well as the substitution effect of natural gas.
(Recently, the correlation between copper and oil prices has weakened.)Analysts believe that this is an extremely important signal for investors.
For economies that are major exporters of key minerals for AI and net importers of oil, such as Chile, Peru, Australia, and South Africa, this 'decoupling' is a significant positive development.
This means that while they benefit from a surge in export revenues driven by commodities like copper, they do not face the pressure of rising import costs caused by a simultaneous increase in oil prices. The result is that these countries’ terms of trade will receive an 'extra boost,' providing stronger support for their currencies than in any previous cycle.
(The improvement in terms of trade will provide an additional strong impetus to the foreign exchange market.)The report uses Chile as an example, where the terms of trade largely depend on the relative prices of copper and oil.
Since 2024, with rising copper prices and falling oil prices, the improvement in Chile's terms of trade has been accompanied by a strengthening of the Chilean peso. This signals the emergence of a new macroeconomic landscape driven by AI, offering structural benefits to specific national currencies.
Based on historical experience and the current trend of increased AI investment, the Chilean peso, Peruvian sol, and Australian dollar should perform well due to the decoupling of copper and oil prices.
The report emphasizes that we are currently in the early stages of this commodities supercycle, a period which history shows is marked by the most significant improvements in trade balances and holds the greatest potential for currency appreciation.
