The artificial-intelligence (AI) surge has yet to raise overall technology-sector demand for gold, as attempts by manufacturers to reduce their use of the metal – still at high prices – offset growth in AI applications last year, the World Gold Council says.

Demand for AI chips has exploded while gold use in technology remained essentially flat at 323 tonnes in 2025 amid miniaturization and manufacturers’ efforts to reduce or eliminate gold from some components. Technology demand for gold gained 7% in 2024 to 326 tonnes, with AI-related gold use contributing modestly, the WGC noted in February 2025. But the wider emergence of co-packaged optics (CPO) could be a new source of gold demand in the AI sector.

‘Tug-of-war’ demand

“We view the current demand situation in the electronics sector very much as a tug-of-war,” the WGC said in its “AI Boom and Gold” report, released Thursday. “At the moment, the two sides appear evenly matched.”

Gold’s modest use in AI thus far tempers expectations that the AI buildout will significantly lift short-term demand for the yellow metal. But in the long term, the council sees potential growth from CPO and other advanced components in which gold remains difficult to replace.

Gold traded at $4,270.30 per oz. on Friday morning, up almost 14% from a year earlier.

CPO is a semiconductor packaging method where optical transmitter and receiver components are integrated with circuits such as computing chips, allowing AI systems to move data faster and improve bandwidth.

CPO needs gold

Due to its durability and electrical conductivity, gold is used in some of the optical and photonic parts of CPOs, such as lasers, and in high-frequency electrodes in chips.

Though it’s relatively early days for CPO adoption, AI industry heavyweights such as US chipmaker Nvidia are investing heavily in its development, WGC said.

If CPO is widely adopted across hyperscale AI infrastructure, new demand for gold in the technology could become meaningful.  Electronics manufacturing represents about 80% of gold usage in industrial applications. Other industrial uses and dentistry account for the rest.