Ultimate chip material? Diamonds abandoned by love are being revived by AI
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The cooling bottleneck of AI computing infrastructure is pushing lab-grown diamonds from an “emotional story” to a “computing logic.”
On May 28, the Wind lab-grown diamond concept index surged by over 13% in a single day; Sifangda and Huanghe Whirlwind hit their daily limit; Huifeng Diamond jumped more than 20%. Looking from a longer time frame, the index has risen 87% since the beginning of the year. The core of this round of market movement is no longer jewelry consumption, but the capital market is re-pricing the industrial attributes of diamonds.
Huaan Securities pointed out that AI chip power consumption and heat flux density are continuously climbing; traditional cooling solutions are nearing their limits, and diamonds—with their ultra-high thermal conductivity—are beginning to enter advanced chip cooling systems. According to a report released by the institution in January, diamonds have a natural thermal conductivity of 2000-2500W/(m·K), about four times that of copper and eight times that of aluminum. This means that under the same conditions, diamond’s cooling efficiency far exceeds traditional materials and shows promise in breaking the physical bottleneck of current chip cooling.
Meanwhile, the Nvidia industry chain narrative has further strengthened market expectations. In February this year, Nvidia announced that its next-generation GPU will use a "diamond composite + liquid cooling" scheme; Jensen Huang has also engaged in industrial discussions with Chinese diamond cooling material companies.
AI chips are slamming into a “cooling wall”
The core contradiction of AI chips is becoming increasingly direct: The stronger the computing power, the higher the power consumption; the higher the power consumption, the closer cooling approaches the performance ceiling.
Huaan Securities noted that as chip integration increases and size shrinks, chip performance keeps improving, but power consumption and heat production rise simultaneously. Related studies show that for every 18℃ increase in the operating temperature of semiconductor components, failure rates increase by two to three times.
This means that high temperatures not only reduce chip performance but also shorten device lifespans, posing safety risks and extra energy consumption. In some high-performance scenarios, the chip’s heat flux density has reached 150W/cm²; in applications like airborne radar, it can even reach 10¹⁰W/cm².
In recent years, the AI industry chain has clearly increased its attention to cooling. From air cooling to liquid cooling, from heat pipes to VC heat spreaders, the entire industry is looking for more efficient cooling solutions.
The issue is that traditional materials are gradually nearing their physical limits. Air cooling may be low-cost and simple, but its effectiveness is increasingly limited for high-load AI chip scenarios; liquid cooling is higher efficiency, but ultimately requires even stronger thermally conductive materials at its core.
For these reasons, the market is beginning to reassess diamond, a material long overlooked in the past.
Why has diamond suddenly become an “AI material”?
The core logic of this market rally is that: diamond’s thermal conductivity far eclipses traditional cooling materials.
Huaan Securities’ data shows that diamond’s natural thermal conductivity reaches 2000-2500W/(m·K), more than four times that of copper and eight times that of aluminum. Industry information previously indicated its thermal conductivity is five times that of copper and ten times that of silicon.
More importantly, diamond not only “conducts heat quickly,” but “matches” heat expansion better. One major issue with traditional cooling materials is that long-term thermal cycling leads to different expansion/contraction rates, causing delamination at interfaces and reduced reliability. Diamond’s thermal expansion coefficient is only 1.0-1.5×10⁻⁶/K—highly compatible with key semiconductor materials like silicon and silicon carbide.
This means even after tens of thousands of thermal cycles, a diamond heat sink maintains stable interfaces, helping to solve cooling reliability in long-term high-power chip usage. As a result, diamond is transitioning from traditional industrial uses to semiconductor packaging and heat sink systems.
Nvidia ignites the narrative, lab-grown diamonds embrace “computing power revaluation”
What truly accelerated this logic is Nvidia.
In February this year, Nvidia announced its next-generation GPU will utilize a "diamond composite + liquid cooling" cooling scheme, becoming a key catalyst for the lab-grown diamond rally.
According to diamond materials company "Chaoying Diamond," the company's diamond-copper composite material has passed Nvidia’s supply chain verification and can be employed to solve cooling for high-power-density AI chips. Earlier, during Jensen Huang’s first trip to China in 2026, he discussed diamond wafer industrialization with CEO Zhu Yanhui.
Given Nvidia’s dominant position in AI chips, this industry signal has quickly amplified market imagination about diamond cooling. TrendForce reports Nvidia GPUs will account for 75.9% in the AI server market by 2025.
Meanwhile, China already holds a global production advantage in lab-grown diamonds. According to the “2025 Lab-Grown Diamond Industry Development Report,” global capacity is about 40 million carats, with China contributing roughly 25.2 million carats—about 63%. This suggests the lab-grown diamond sector, once seen as suffering from “overcapacity,” is now being revalued as part of the AI computing infrastructure chain.
After the “consumption bubble,” how far can “cooling revaluation” go?
In recent years, the lab-grown diamond industry has experienced a typical bubble burst: the market once firmly believed it would disrupt natural diamond consumption, but rapid supply expansion and falling prices led to overcapacity. This time, market logic has shifted from “consumption” to “technology.”
Huaan Securities noted, diamond cooling technology is still at the frontier development stage, with potential applications expected to expand continuously. Estimates show that in a conservative scenario, the global diamond cooling market could reach 9.7 billion yuan by 2032; in an optimistic scenario, 97.4 billion yuan. The market is repositioning diamond from jewelry and industrial materials to advanced cooling systems for AI chips and semiconductor packaging—this is a “industry identity switch” driving revaluation.
Market pace is often ahead of industry progress. The current rally more likely reflects future potential rather than realized performance. Technical development, customer validation, and alternative schemes all require time to test.
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