Author: Dr Gordana Kierans

A diamond is forever

In times of social media, real influencers, and AI-generated videos, one might get the impression that we only recently invented market manipulation. Far from it, and one example that proves this is the diamond. Yes, the diamond: the universal symbol of eternal love.

Or so we are told.

Diamonds are crystallised carbon created under extreme pressure in the earth and are the hardest natural substance found on the planet. They have been highly sought after for centuries and were mined mainly in India and Brazil. In 1870, the British discovered large diamond deposits in their colony of South Africa. A young British businessman by the name of Cecil Rhodes, remembered today as one of colonialism’s most controversial figures, entered the diamond market a year later and went on to co-found De Beers. It is not only a business name. It is an enterprise that gained control of roughly 90% of global diamond production at its peak by artificially inflating prices and hoarding supply. De Beers simply controlled both the supply and the demand side of the entire diamond market.

De Beers understood that supply controls price. That is simple Economics 101 and thus no surprise. What is exceptional is that they controlled the demand as well. To increase demand, they launched a very clever marketing campaign in 1938 aimed at the growing middle class and in 1947 coined the now legendary tagline “A diamond is forever”. As Edward Jay Epstein documented in his classic 1982 investigation for The Atlantic, the campaign involved highlighting diamonds in Hollywood films, promoting celebrity endorsements from movie stars, and even sending lecturers to high schools to promote the diamond engagement ring as a mandatory social norm. The brilliant goal was to convince the consumer that the physical durability of diamonds is linked directly to the eternal nature of romantic commitment and thus the undeniable proof of eternal love representing the sincerest promise to spend a lifetime together.

De Beers launched their international rollout into Europe and postwar Japan where diamond engagement rings were previously non-existent. 

As the size of the diamond can differ, they even quantified how much a groom should actually spend: one month’s salary at first, followed by two months by the 1980s (“How can you make two months’ salary last forever?”), and in Japan even three months’ earnings. 

The De Beers monopoly was eventually undermined by new mines in Australia, Canada and Russia, alongside the rise of lab-grown diamonds and emerging ethical concerns over “conflict diamonds”. Yet the slogan’s cultural impact continues to define the global jewellery market to this day.

And it brings us to today, and to this Circular Times article, written with a row of diamonds encased in gold on my left finger. These diamonds were not always encased. Originally, they sat on a golden ring and were held by tiny golden claws, which over the years began to break off. So, we went to a jeweller, who reset them securely in gold. My diamonds, of course, remained untouched over two decades on my finger. Remember this detail for later.

As regular Circular Times readers know, I obviously won’t be writing about a symbol of eternal love. Nor even about the dark side of diamond mining, from conflict financing to labour exploitation, which deserves an article of its own.

The background for this article is to highlight the economic concept of disruption, more precisely the disruption recently caused by the Chinese producing synthetic diamonds. However, the Chinese are not so much interested in upending the current diamond market (although that is also happening). Their focus is on the industrial side of diamond production. Diamonds are being grown by the tonne in reactors across Henan province, and they are about to be soldered into the hottest hardware on the planet: AI chips.

That diamonds can be used for industrial purposes is not new to me. Years back, I consulted a medium-sized company in Northern Hesse, Germany, that uses diamonds for its most demanding saw profiles. Diamond’s properties, such as its extreme hardness and its ability to withstand extreme pressure, remain highly regarded by industry.

As already said, this is a story about disruption. But it is also a story, to no regular reader’s surprise, about circularity, and about what happens when a material that never degrades meets an industry that traditionally throws everything away.

Act one: how China broke the diamond myth

China has many critical raw materials, but diamonds are not among them. However, the country’s leadership did understand their importance, just maybe not for the same reason as De Beers. Displays of wealth and eternal love were not the first priority of the country’s leadership in the 1960s. So, in December 1963, researchers at the Zhengzhou Abrasives & Grinding Research Institute (郑州三磨所) produced China’s first synthetic diamond, only nine years after General Electric’s famous first synthesis in 1954. GE itself writes about that breakthrough in one of its own news articles.

The mid-1960s brought the development of China’s signature technology: the six-anvil cubic press (六面顶压机), a high-pressure, high-temperature machine that was a cheaper, more scalable alternative to the Western belt press and produced diamonds in weeks. That machine is why China could eventually mass-produce diamonds by the tonne. Henan factories simply multiplied thousands of these presses. For decades the output was industrial grit for saw blades and drill bits, and only around the mid-2010s did Henan producers crack gem-quality stones at scale, which triggered the jewellery disruption. More recently, chemical vapour deposition reactors joined this market by producing the high-purity material that many high-tech applications demand.

We need to understand that a lab-grown stone is chemically and physically identical to a mined one. Once consumers understood that, the scarcity narrative that sustained diamond pricing for over a century began to dissolve. China now produces more than 60 per cent of the world’s gem-quality lab-grown diamonds, and an even larger share of industrial-grade synthetic diamond. I remember seeing many of these stones displayed in a large jewellery shopping centre in Luohu, a district of Shenzhen. These days, displaying wealth has become a must among the new Chinese middle class. It has always been the case with the Hong Kong elite, who also shop in Shenzhen.

But, as I said, this article is not about the vanity role of diamonds.

For years, industry consoled itself that this was just a jewellery problem. It was not. Collapsing production costs did something far more interesting: industry has turned the hardest material on Earth into an engineering commodity.

Act two: the AI boom finds its coolant

AI has recently become a hot topic of discussion, ranging from high efficiency promises to mind-boggling investments, all the way to the hyperscaler boom and the negative impact they have on their immediate environment. One of the main reasons for the recent stakeholder blocking of data centre expansion is their heat emissions, which need to be fought either by gargantuan amounts of energy or with water, a resource highly under pressure in recent years.

When faced with resistance, the first corporate impulse is to go quiet. Hyperscalers started hiding their projects behind shell companies with names like ‘Greater Kudu LLC’. This made journalists and stakeholders pursue other avenues: filing air-permit requests by the hundreds, tracing generator and turbine purchases and even flying thermal drones over facilities to reveal unpermitted gas turbines, as Nieman Lab documents. The scale is no mere footnote either: the energy-tracking firm Cleanview counts 59 ‘behind-the-meter’ data centres in the US with some 90 gigawatts of planned capacity, designed to run on their own gas generators and turbines because the grid cannot keep up.

In summary, data centres are not going anywhere. Nor are their heat emissions, caused by the computational power of tens of thousands of servers. And a solution to the problem seems to be the material that can be formed under pressure in earth for millions of years, and now in a lab in only a few weeks: the diamond, which coincidentally has the highest thermal conductivity of any known natural material, spreading and dissipating heat directly at the source.

Next-generation AI processors are pushing past power densities that copper and aluminium simply cannot handle. A diamond conducts heat roughly five times better than copper, and unlike metals it is also an electrical insulator, which means it can sit directly against the silicon.

In 2026, this reality entered Western boardrooms. A US firm, Akash Systems, delivered the first diamond-cooled AI servers to a customer, MSI showed diamond-copper cooling components for Nvidia GPUs at Computex, and Chinese suppliers report their materials passing validation in Nvidia’s supply chain. A note of honesty is due here: Nvidia itself has announced only liquid cooling so far, and even Chinese state media warn that the diamond-cooling stock rally ran ahead of the facts. The direction is real; the timeline is younger than the hype.

On the other side, Chinese producers such as SF Diamond and Henan Liliang began commercial shipments of diamond heat spreaders after passing client validation. Analysts at China Galaxy Securities now describe diamond as effectively mandatory wherever single-chip power consumption exceeds 1,400 watts, because it is the only material that works at the node, package, and module level simultaneously.

The production numbers followed. China’s lab-grown diamond exports, through the Shanghai Diamond Exchange, jumped 65 per cent in the first half of 2026, to roughly 210 million US dollars, with AI-related industrial demand now emerging as a second growth engine alongside jewellery. Forecasts for the diamond cooling market range from about 1.3 billion dollars this year to somewhere between 7 and 13 billion dollars by 2030, depending on whose penetration assumptions you trust. Even conservative estimates imply a compound growth rate above 50 per cent.

So, diamonds are now critical infrastructure for artificial intelligence and China dominates the supply. That alone should make Western policymakers sit up. But you, as a regular reader of our Circular Times, know what I am most committed to. We now have an opportunity to design these new wafers for circularity. We missed our chance for gold, but we do have a chance to get diamonds back if we consider them valuable at the design phase.

But will we?

Can we get them back?

Here is the paradox at the heart of this article. Diamonds may be the most recoverable material ever put into electronics, and yet their realistic circularity rate today is effectively zero.

However, let me start with some good news. As a group of Chinese researchers in their article in Functional Diamond illustrate, a diamond is chemically inert and thus immune to strong acids, bases, and solvents. You can dissolve away the solder, the metallisation, even the copper matrix of a composite, but the diamond emerges intact. It does not fatigue, oxidise, or degrade in use. The diamond that comes out of a decommissioned server is functionally identical to the diamond that originally went in. Industrial diamond recovery is also not new as recyclers have reclaimed diamond grit from drill bits and cutting tools for decades with tens of millions of carats recycled a year in the United States alone at the industry’s peak.

However, now for the bad news, in three parts.

First, dispersion. A heat spreader is a sliver of diamond, typically under two millimetres thick, brazed deep inside a chip package, inside a server, inside a data centre. Today’s e-waste systems shred first and sort later. Nothing in that pipeline is designed to liberate a fingernail-sized wafer from the very middle of a bonded assembly. And diamond-copper composites are worse still as the diamond is particulate, scattered through a metal matrix.

Second, we are back to Economics 101, only this time running in reverse. De Beers used supply control to keep prices artificially high; Chinese production efficiency has pushed them so low that recovered material struggles to compete. When a new heat spreader costs less than the labour of extracting an old one, recovery happens only if regulation or carbon accounting forces a new calculation.

Third, and most fundamentally: the value was never the carbon. Carbon is the most abundant building block we have. What is embedded in a CVD diamond is energy and precision. This matters for how we measure success. Circularity metrics that count recovered mass would score a diamond heat spreader as a rounding error. Metrics that count embodied energy would tell a very different story.

Let me illustrate with an example: A kilogram of recycled copper and a kilogram of recycled diamond count the same in our statistics, yet the diamond holds tens of thousands of times more embodied energy than the metal it is replacing. As a consequence, the embodied emissions depend on the electricity mix, and China’s electricity was still 58 per cent fossil-fuelled in 2025, according to Ember. Every tonne of diamond grown today therefore carries a heavy load of embodied CO2, a load that multiplies as production scales.

So, diamonds are a small, sharp test case for a common question facing the circular economy field. Are we measuring the right thing?

Reuse beats recycling, if anyone builds for it

Because a diamond does not degrade, the highest-value loop is not recycling at all. A heat spreader from a retired GPU could, in principle, be stripped, re-metallised, and redeployed in the next generation of hardware. Data centres refresh their accelerators every three to five years. That means a large and rapidly growing stock of essentially pristine diamonds will start entering the waste stream from around 2028, precisely when the market for diamond cooling is projected to be scaling fastest.

Nobody has built the reverse logistics for this yet. There is no take-back scheme, no design-for-disassembly standard for diamond-bearing packages and no secondary market for reclaimed thermal-grade diamonds. China has dedicated two of its five-year plans to circularity. The current one, the 15^th Five-Year Plan (2026–2030), puts systemic circular economy development and resource recycling infrastructure at its core. Thus, a topic that enters a five-year plan is a strategic priority for the country. Solar panels and electric cars were once on five-year plans. Diamond technology now carries the same status. In October 2025, Beijing announced export controls on superhard materials and the machines that produce them. The controls were suspended for a year during the trade truce with Washington, but the message was sent. These diamonds are no longer just jewellery; they are geopolitics.

The window to design these loops remains open for now, while the installed base is still small and the component standards are still being written. A timely proactive approach would save China, and all other countries, headaches down the road and would support national decarbonisation goals. In five years, it will be another retrofit problem. Applying our current logic, we might end up producing diamonds at a high energy penalty, capturing carbon with expensive technology to feed new diamond production, and then wasting those diamonds the moment they enter our chips. The value loss would be more than two months’ salary.

The Circularity Gap Report 2026 put the global circularity rate at 6.9 per cent and the value lost in linear material flows at 25.4 trillion euros. Diamond in AI hardware is a fresh tributary flowing straight into the other 93.1 per cent: a material that could circulate indefinitely, entering an industry with no mechanism to bring it back.

So, ironically, De Beers was half right. A diamond can be forever. For now, circularity in the diamond industry is still a diamond in the rough: the value is there, the polish is not. Whether it gets that polish depends entirely on the choices being made in chip packaging labs and procurement departments right now.

Forever is not a property of the material itself. Rather, it is a property of the system we build around it. Countries and policymakers have an opportunity now to apply the learnings from past mistakes and design a system that eliminates value loss at the design phase.

Sources

Edward Jay Epstein: Have You Ever Tried to Sell a Diamond? The Atlantic, February 1982 (De Beers campaign and the salary rule). https://www.theatlantic.com/magazine/archive/1982/02/have-you-ever-tried-to-sell-a-diamond/304575/

GE: Diamonds Weren’t Forever in the GE Store, but Carbon Will Be (first diamond synthesis, 1954). https://www.ge.com/news/reports/diamonds-werent-forever-in-the-ge-store-but

Xinhua: 跨越一甲子 一“钻”天下闻 — 河南金刚石产业发展观察, September 2023 (China’s first synthetic diamond, 1963, and Henan’s rise). https://www.news.cn/politics/2023-09/15/c_1129864389.htm

South China Morning Post: China’s lab-grown diamonds get an AI boost as industry rides demand for chip cooling, September 2026 (Shanghai Diamond Exchange export data; over 60 per cent global production share). https://www.scmp.com/economy/china-economy/article/3363310/chinas-lab-grown-diamonds-get-ai-boost-industry-rides-demand-chip-cooling

Bloomberg: China’s Lab-Grown Diamonds Emerge as Unlikely Winner in AI Boom, June 2026 (SF Diamond and Henan Liliang commercial shipments). https://www.bloomberg.com/news/articles/2026-06-02/china-s-lab-grown-diamonds-emerge-as-unlikely-winner-in-ai-boom

China Daily: AI adds sparkle to synthetic diamond sector, 2026 (China Galaxy Securities on the 1,400-watt threshold; market forecasts to 2030; note that its Vera Rubin adoption claim is not confirmed by Nvidia). https://www.chinadailyhk.com/hk/article/637111

CGTN: Diamond cooling mania: How a $7 billion rally ran ahead of the facts, June 2026 (Nvidia has announced only liquid cooling; Akash Systems’ diamond-cooled servers; MSI at Computex). https://news.cgtn.com/news/2026-06-28/Diamond-cooling-mania-How-a-7-billion-rally-ran-ahead-of-the-facts-1OltGruc3jW/index.html

Nieman Lab: As AI data centers scale, investigating their impact becomes its own beat, March 2026 (shell companies, air permits, thermal drone imaging). https://www.niemanlab.org/2026/03/as-ai-data-centers-scale-investigating-their-impact-becomes-its-own-beat/

Cleanview: Behind-the-Meter Data Centers (59 US sites, about 90 GW of planned capacity). https://cleanview.co/reports/behind-the-meter-data-centers

Mou, C. et al.: Diamond and diamond-like carbon for tribology and corrosion protection: a retrospective review. Functional Diamond, Vol. 5, No. 1, 2025 (chemical inertness). https://doi.org/10.1080/26941112.2025.2599451

US Geological Survey: Minerals Yearbook 2001, Industrial Diamond, by Donald W. Olson (over 10 million carats of industrial diamond recycled in the US in 2001). https://d9-wret.s3.us-west-2.amazonaws.com/assets/palladium/production/mineral-pubs/diamond/diamon01.pdf

Ember: China energy trends (58 per cent fossil share of electricity generation in 2025). https://ember-energy.org/countries-and-regions/china/

Global Times: China to impose export controls on superhard material items starting November 8, 2025 (MOFCOM Announcement No. 55). https://www.globaltimes.cn/page/202510/1345235.shtml

CIRS Group: China Temporarily Suspends Export Controls on Key Raw Materials, Including Diamonds (suspension from November 7, 2025 to November 10, 2026). https://www.cirs-group.com/en/chemicals/china-temporarily-suspends-export-controls-on-key-raw-materials-including-rare-earths-lithium-batteries-and-diamond

Circle Economy: Circularity Gap Report 2026 (6.9 per cent global circularity rate; EUR 25.4 trillion Value Gap). https://www.circularity-gap.world/

This article is part of our work on circular economy and artificial intelligence. MGT OPEN’s executive programme Circular Economy and Artificial Intelligence: Leading the Twin Transition takes place on the Crikvenica Riviera, Croatia, 14 to 18 June 2027. Details and registration on MGT OPEN.