Greenland Geopolitics & Supply Deficit Ignite Silver Price Surge — Could Silver Be the Next AI Metal?

The silver market has been performing phenomenally and silver has especially been in the spotlight. In 2025, silver prices increased by 144%, and in 2026, they surpassed an incredible $95 per ounce. The market's structural imbalance and the escalating geopolitical tensions have been blamed for this unrelenting upward momentum.

The recent surge in silver prices is not due to speculation, but rather due to the perpetually increasing silver supply deficitand an exponential growth in silver industrial demand driven by emerging technology, particularly artificial intelligence (AI). Geopolitical tensions regarding Greenland and emerging AI technology have raised further questions about silver becoming the next (AI Metal) like copper during the electrification era. This article looks into the driving forces of the recent surge in silver prices.

Geopolitics, AI, And Silver Supply Deficit

Silver has been in a supply deficit for the past five consecutive years, with 2026 expected to be no different. Global mined silver production in 2025 remained relatively stagnant, at around 813 million ounces, with the increase in Mexico and Russia production being offset by declines in other countries. 

The current shortfall is due to silver's unique supply issue. About 70-80% of the silver supply is derived from secondary mining yields, meaning the silver is extracted from the mining of other metals like lead, zinc, copper, and gold. When primary mining halts, silver extraction suffers the most. Although recycling and the availability of silver in above-ground stocks alleviate some of the net shortfall, it is insufficient to plug the hole as demand continues to rise.

Another reason for the shortfall is the widening gap between total supply and industrial consumption of silver. Persistent shortfalls have now become an expected phenomenon of the silver market due to industrial demand and consumption. The more demand in the market, the more it is correlated to the rising price of silver.

Surging Silver Industrial Demand: The AI Connection

The main reason that silver is more affordable than gold is due to silver's heavy industrial use. Around 50% of silver demand, the highest industrial use of the metal, comes from photovoltaic (solar) panels, electronics, and automotive sectors. This is now changing due to the increasing demand and use of AI technologies. 

Large-scale data centres, like those used to support AI, require special high-performance switches, connectors, and wiring for their electrical infrastructure. Silver, due to its unparalleled conductivity, is ideal for these components. The construction of data centres is flourishing as the adoption of Artificial Intelligence (AI) rises. Silver is used for devices and distribution systems such as circuit boards and servers. Silver is used in advanced electronics and semiconductors due to its exceptional thermal and electrical properties. Silver is positioning itself as an essential material in the AI revolution due to its increasing prominence in the 'physical AI stack'-chips, servers, and other related infrastructure.

AI amplifies the need for more efficient conductive solutions. The energy-demanding nature of AI, coupled with the existing robust demand for solar energy, is further increasing the need for energy-efficient solutions. The demand for electric vehicles, IoT devices, and 5G networks is also contributing to the demand for industrial silver. Demand substitution is limited, even with the higher prices, as silver is a compromised substitute in terms of performance for its many applications.

Access to Greenland: A New Angle to The Metal’s Story

The renewed interest of the U.S. to partner with Greenland during the Trump Administration focused the attention of the world on the Arctic island. The strategic value of Greenland lies in its under-extracted valuable and essential minerals such as rare earths, silver, and base metals like copper and zinc. 

While direct silver mining may not be the most valuable, the increased demand for precious metals during the last couple of years from the geopolitical tensions due to the U.S.-China rivalry, combined with the increasing accessibility of the resources from the Arctic due to melting ice, has increased the demand for silver.

Projected tensions in the Geopolitics of Greenland illustrate weaknesses in the global supply chain. Investors see silver as a safe investment during global turmoil and in the critical minerals market, similar to the way gold performs during turbulent times. The global supply chain tensions and events surrounding Greenland have had a direct correlation with the rising prices of gold and silver in international markets.

Is Silver the New AI Metal?

Copper was considered the AI Metal of the Grid Expansion, but given silver's superior conductivity and essential component in AI Metal Silver, it also should not be overlooked. Silver outperforms copper in the miniaturised, high-frequency applications essential for AI hardware.

The demand for AI-based computing, especially in data centres, is expected to increase the demand for silver by hundreds of millions of ounces each year over the next decade. In combination with the demand for green energy and EVs, the demand for silver will experience a multi-year demand tailwind. Silver's supply constraints will likely cause silver to outperform the traditional precious metals.

Silver Price Forecast: What's Next?

So, what is next for silver? There are many varying opinions on the price of silver. The more bullish projections have analysed the price of silver at $100 - $150 by 2026 and some even claim it could reach $200 if the AI demand surges with the silver market lacking supply.

On the flip side, prices could see a more tame price appreciation or even price crashes in a more bearish prediction setting forth prices with set limits of appreciation. Supply, geopolitical factors, and wide-ranging demand will be the main factors to be considered with silver as a precious metal.

The silver price forecast is dictated by factors such as sustained industrial development and mining activities, as well as macroeconomic measures including interest rates and dollar valuation. For the time being, the fundamentals still support the factors mentioned above.

Final Thoughts

The combination of supply deficits, significant demand for silver from AI and green technology, and increasing tensions in Greenland geopolitics has triggered an unprecedented increase in silver prices. Silver has become much more than a precious metal; it is now a vital industrial commodity crucial for powering the future.

Whether AI metal silver will become the next significant trend will depend on the construction of data centres and policies focused on resource competition. Investors in this area will likely find silver to be a very attractive asset due to its defensive and growth potential in these uncertain times.

DISCLAIMER: This blog is NOT any buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always consult your eligible financial advisor for investment-related decisions.