AI data centers need more raw materials. One investor is betting on recyclers.
As hyperscalers race to build AI data centers, companies that recycle critical components have become an investment opportunity.
Tazia Smith, CEO of Closed Loop Capital Management, shared her insights with Business Insider on Wednesday about the growing demand for raw materials in the AI sector. Data centers, she noted, are incredibly resource-intensive and the need for materials such as aluminum and copper is on the rise. Tazia Smith spoke to Business Insider's Dan DeFrancesco on Wednesday, saying that she works with companies that recycle raw materials in their supply chains.
As AI hyperscalers race to build data centers across the country, opportunities for recycling at scale are multiplying, Smith explained. Components inside data centers need to be repaired or replaced frequently, and Smith's company specializes in recycling these expensive components. Major players in the AI industry, including Microsoft and Meta, are focused on resilient supply chains and material security, Smith said.
Data centers have faced criticism for their environmental impact, and Smith mentioned a company that specializes in fixing water leaks inside data centers to reduce harm. Another company she works with, Moog, repairs important computing components like semiconductor chips, preventing the need to buy replacements every few years.
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