Silver is the AI Metal. Australia is Right in the Middle

The global build-out of AI infrastructure is lifting demand for materials most people do not usually associate with technology. Silver is one of them.

In 2026, the silver market is on track for its sixth consecutive year of supply deficit. The Silver Institute projects a shortfall of 67 million ounces this year. Across 2021 to 2025, cumulative deficits reached almost 820 million ounces, close to a full year of global mine production.

A big part of that story is industrial demand. The Silver Institute says industrial demand reached a record 680.5 million ounces in 2024, more than half of total silver demand, supported by solar, electrification and AI-related electronics.

The Solar Connection

Silver remains essential to solar manufacturing because of its conductivity and its role in photovoltaic cells. The IEA says silver demand from solar PV manufacturing in 2030 could exceed 30 per cent of total global silver production in 2020. Even allowing for thrift and substitution, solar remains one of the market’s key structural demand drivers.

Australia’s Data Centre Boom

Australia is well placed in this build-out. CommBank estimates around six gigawatts of new data centre capacity are in the pipeline nationally, representing about A$150 billion in investment. AWS announced an A$20 billion commitment in 2025, described by Amazon as the largest global technology investment announcement in Australia’s history.

These facilities need power, and renewables are increasingly part of that equation. Australia has about 4.2 million rooftop solar installations and 28.3 gigawatts of installed rooftop capacity, and the Clean Energy Council expects the country to exceed its 2030 rooftop solar target. Each new installation adds to the broader industrial backdrop for silver demand.

Data centres currently account for about 1 per cent of Australia’s electricity use. By 2035, that could rise to 8 to 11 per cent, according to CEFC modelling.

Supply Can’t Keep Up

Australia has world-class silver reserves and remains an important producer, but the broader market is still tight. The Silver Institute says global mine supply reached 819.7 million ounces in 2024 and expects mine production to edge up only modestly in 2026, while the market still remains in deficit.

The longer-term point is straightforward. Demand linked to solar, electrification and digital infrastructure has risen faster than supply can comfortably absorb.

By the Numbers

• Global supply deficit, 2026: 67 million ounces projected
• Cumulative deficit, 2021 to 2025: almost 820 million ounces
• Industrial demand, 2024: 680.5 million ounces, record high
• Australian data centre pipeline: about 6 GW, about A$150 billion
• Australian rooftop solar: about 4.2 million installations, 28.3 GW installed capacity
• Data centre share of Australian electricity use by 2035: 8 to 11 per cent

Where Does Bullion Fit?

Silver has long sat between monetary metal and industrial input. That balance still matters, but the industrial side of the story is becoming harder to ignore. For Australian investors, that matters because Australia sits across all three themes: resources, solar and data infrastructure.

Physical silver carries no counterparty risk. It also gives investors exposure to a market where real-world industrial use remains substantial, even as the demand mix evolves.

The Bigger Picture

The world’s largest technology companies are spending heavily on AI infrastructure, while the silver market is still running deficits. That does not make silver a pure AI trade, but it does strengthen the case that silver is now tied more directly to the build-out of energy and digital infrastructure than it was a decade ago. Australia sits at the intersection of that shift.