The rise of artificial intelligence is usually discussed in terms of advanced chips, high-scale data centers, cloud computing and increased demand for electricity. Another race is unfolding behind the scenes—one that may be just as important to the future of AI. It is a race for critical minerals, processing capacity and industrial expertise.
For Canada, one country rich in mineral resources and increasingly active in AI researchthis convergence represents a significant economic opportunity. Every artificial intelligence server, robotic platform, electric vehicle, advanced sensor and defense system depends on minerals such as rare earth elements, gallium, germanium, graphite and other strategically important materials. As AI adoption accelerates, the demand for these materials is expected to increase in addition to the demand for computer infrastructure. At the same time, governments across North America, Europe and Asia are looking for alternatives to supply chains that remain heavily dependent on China.
The result is a new phase in the AI economy where mineral security and technological innovation are increasingly intertwined.
AI is transforming the mineral industry itself
An emerging trend is that AI is not only consuming critical minerals, but helping to produce them. An example comes from Aclara Resourceswhich is collaborating with Stanford University’s Mineral-X initiative, Argonne National Laboratory and Virginia Tech to develop AI-driven technologies for rare earth exploration and processing. These efforts include predictive models that identify promising mineral deposits and AI-powered digital twins that simulate and optimize complex rare earth separation processes.
Argonne National Laboratory notes that advanced computingprocess modeling and artificial intelligence can help accelerate the transition from pilot-scale operations to commercial-scale rare earth production. Such digital tools can reduce costs, improve recovery rates and reduce industrial growth risks.
This matters because processing rare earth elements is often more challenging than mining them. Development of expertise in refining and separation technology can create long-term competitive advantages beyond simple resource extraction.
Why do rare earths matter to AI?
Rare earth elements are essential inputs for permanent magnets used in robotics, electric motors, drones, wind turbines and advanced electronics. Elements such as dysprosium and terbium play a particularly important role in high-performance applications.
As AI expands into physical systems including autonomous vehicles, industrial robotics and smart manufacturing, the demand for these materials will continue to grow. Governments have become increasingly concerned in relation to supply chain resilience because China continues to dominate significant parts of rare earth mining and, especially, processing activities. Recent export controls on some critical minerals have raised concerns among allied nations about long-term security of supply.
As a result, countries are increasingly looking to develop domestic mining and processing capacity, or partner with reliable allies that can provide secure supply chains.
Canada enters this new environment with several advantages. of The federal government’s Critical Minerals Strategy identifies critical minerals as the basis for the green and digital economy. The strategy aims to support exploration, processing, production and recycling while strengthening Canada’s role in global supply chains.
According to Natural Resources Canadathe country now has 56 active critical mineral mines, 31 processing facilities and more than 170 advanced critical mineral projects. The sector contributed approximately $40 billion to Canada’s GDP and supports approximately 110,000 direct and indirect jobs.
Canada has gained an international reputation in artificial intelligence through work done at institutions such as the Vector Institute, Mila and the University of Alberta. While much discussion focuses on AI software innovation, Canada could potentially gain a greater advantage by combining AI capabilities with natural resource expertise and advanced manufacturing. Therefore, Canada may be uniquely positioned to connect two of the world’s most strategic sectors: artificial intelligence and critical minerals.
Historically, Canada has often exported raw materials while deriving less value from downstream processing and manufacturing. Recent developments suggest another path.
For example, Aclara is developing a vertically integrated rare earth supply chain outside of China, including a planned rare earth sharing facility in Louisiana. The facility is designed to process materials into high purity rare earth oxides used in advanced technologies and is expected to strengthen the resilience of the North American supply chain.
The broader lesson for Canada is that future competitiveness may depend less on discovering mineral deposits and more on mastering processing technologies, industrial digitalization and supply chain integration. This aligns closely with Canadian policy priorities. The country’s Critical Minerals Strategy explicitly supports innovation, value-added processing, research partnerships and infrastructure development designed to strengthen local value chains.
A growing geopolitical opportunity
Recent developments underline the strategic importance of the sector. Canada and Japan are said to be exploring deeper cooperation around critical mineral supply chains as both countries seek to reduce vulnerabilities associated with concentrated global supply. Similar partnerships are emerging across the United States, Europe and other allied economies.
Within Canada, investment is also expanding. Teck Resources, Canada Growth Fund and Natural Resources Canada’s Critical Minerals Accelerator Recently announced plans to support expanded production capacity for strategic metals including germanium, gallium and antimony—essential materials for semiconductors, telecommunications and advanced electronics. These developments illustrate how critical minerals have evolved from a mining issue to a national competitiveness issue.
