Everyone Buried Lithium – Right Before the Real Boom Began

Wall Street loves to bury its mistakes. 

Right now, lithium is six feet under – entombed by disappointing electric vehicle forecasts, a supply glut, and an entire industry that overshot the runway. The metal that was supposed to power the EV revolution became a cautionary tale; a reminder that hype and reality don’t always align.

Yet, while everyone was writing lithium’s obituary, the story changed completely.

As AI proliferated across the globe, data centers did, too – causing significant stress to the power grid. And the grid has responded by increasingly turning to utility-scale batteries to fulfill outsized power demand. 

Indeed, maybe the catalyst wasn’t electric vehicles at all… but artificial intelligence.

Lithium is now being woven into the infrastructure of the AI revolution – not as a supporting player, but as a critical enabler.

This is the Lithium Boom 2.0: deeper, more structural, and potentially far more lucrative. 

And it has all the makings of 2026’s breakout AI trade that nobody sees coming.

Lithium 1.0: From Hype to Hangover

Between 2020 and ’22, lithium was a rock star on Wall Street. 

EV sales were growing 50%-plus per year. Automakers were panic-signing long-term offtakes, with analysts warning about shortages. Spot prices went vertical. Lithium miners performed like meme stocks but with strong fundamentals.

Then… the hangover.

Central banks around the world hiked interest rates. EV demand growth decelerated. Chinese EV makers were embroiled in a price war. And all the supply that was funded during the boom began entering the market.

As a result, prices collapsed, sentiment evaporated, and lithium went from a can’t-lose EV megatrend play to “why does this still exist in my portfolio?”

Most investors’ lithium outlook is still anchored in this EV-bubble-and-bust narrative.

And that’s exactly why this setup is interesting…

Because the fundamentals are evolving – but the narrative hasn’t caught up yet.

When Lithium Becomes a Part of the AI Power Story

There’s a simple connection it seems most people aren’t making:

• Ever-growing levels of AI compute is massively increasing data center power demand.
• That’s forcing utilities and hyperscalers to restructure the grid with huge amounts of energy storage.
• And the workhorse technology for that storage? Lithium-ion batteries.

In other words… the more AI we deploy, the more electrical stress on the grid, the more batteries we need. And the more batteries we need, the more lithium we consume.

Now picture where that demand is coming from – AI’s industrial heart: data centers. Massive, always-on, power-hungry facilities that can’t afford a single flicker. That’s a perfect use case for:

• Utility-scale battery farms
• On-site data center battery systems for backup and smoothing
• Behind-the-meter storage that lets hyperscalers arbitrage prices, shave peaks, and survive the next heat wave or storm

This is the first big leg of Lithium 2.0 demand. And we’re very early in that transition. 

Most investors are still thinking: ‘Lithium = EVs. EV growth slowed = lithium bad.’

The emerging reality is closer to: ‘Lithium = EVs plus AI-driven energy storage. EVs are a little slower, but the grid and data centers are picking up the slack.’

If that’s true – and the data is increasingly suggesting as such – then the EV bust may have created one of the best entry points into a still-growing lithium demand curve.