China’s lab-grown diamond producers have emerged as an unexpected beneficiary of the AI infrastructure boom, with the sector’s A-share concept index surging over 90% year-to-date through late May, according to Bloomberg and Wind Financial Terminal data. The catalyst is not jewelry demand — which has been in a prolonged price slump — but diamond’s appeal as a chip-cooling material. Diamond’s thermal conductivity is roughly five times that of copper, and as next-generation AI GPUs push single-chip peak power consumption past 2,300 watts, copper-based cooling is approaching its physical limits. In February, Nvidia announced its next-generation GPU chips would broadly adopt a “diamond composite material plus liquid cooling” thermal solution; Nvidia partner Akash Systems has since delivered what it describes as the world’s first diamond-cooled Nvidia GPU servers to a sovereign cloud provider in India, with the technology since extended to AMD’s high-end AI chips. Bloomberg noted that several Chinese producers reported clients have validated their diamonds as effective heat spreaders and begun commercial shipments.
China accounts for roughly 63% of global lab-grown diamond rough production capacity, with Henan Province as the global core hub — Zhengzhou alone hosts 122 enterprises along the chain. Listed players including North Industries Red Arrow (000519.SZ), Huanghe Whirlwind (600172.SS), and Liliang Diamond (301071.SZ) have surged on the news. Analysts caution, however, that the rally is largely sentiment-driven. The dominant Chinese production method — high-temperature high-pressure (HTHP) — suits jewelry but not semiconductor thermal materials, which require chemical vapor deposition (CVD), impurity levels below one part per billion, and typically two to three years of fab certification. North Industries Red Arrow acknowledged in recent investor communications that diamond heat spreader applications remain “mostly in the engineering prototype experimental verification stage, with no mature market yet formed.” The chip-cooling diamond market is projected to grow from about $37 million in 2025 to $15.2 billion by 2030.