Talk Your Book: The Most Important Thing Nobody Owns

In 2022, nobody had ChatGPT on their radar. Yet the AI boom that followed is now driving a surge in demand for physical materials—copper, uranium, lithium, rare earths—that most investors don’t own. Steve Schoffstall, head of ETFs at Sprott Asset Management, joined the Animal Spirits podcast to explain why critical materials are becoming a non-technology way to play artificial intelligence, and why the supply-demand math looks increasingly strained.

What “critical materials” actually means

The term isn’t marketing. Governments maintain official lists of critical materials—the U.S. Geological Survey, the European Union, and Canada each have their own. The common definition: metals that are important for national security, economic security, or defense, and are subject to supply disruptions. Sprott’s Critical Materials ETF (ticker: SETM) narrows that universe to nine investable metals: copper, uranium, rare earths, silver, lithium, nickel, cobalt, graphite, and manganese. The fund owns the miners of these materials, not the physical commodities themselves. About 35% of the portfolio is in Canadian equities, 21% in Australia, and 20% in the U.S., with another dozen or so countries represented.

The structural supply deficit that keeps widening