HONG KONG, July 8 — For communities across Asia, the copper wire that powers the world’s artificial intelligence boom is becoming a magnet for theft, and a 2023 audit has revealed that a troubling number of scrap metal recyclers are failing to follow the law. The Institute of Scrap Recycling Industries (ISRI) reported that in 2024, U.S. recyclers processed over 8 million tons of copper scrap, valued at $25 billion.
That enormous flow of metal, much of it destined for the sprawling new AI data centers being built from Virginia to Arizona, has created a lucrative black market for stolen copper. Thieves target construction sites for the raw material, and recyclers are the primary buyers.
Many states, including Virginia and Arizona, have laws requiring recyclers to record seller identification and hold payments for stolen materials. These rules are meant to deter theft and make it harder to sell stolen goods. But a 2023 audit by the Virginia State Police found that 30% of recyclers in the state failed to comply with documentation requirements.
That means nearly one in three recyclers checked were not keeping the basic records needed to track where the copper came from. Closer to home, the implications for Asian communities are significant.
Much of the scrap copper processed in the U.S. is exported to smelters and manufacturers across the region, including in China, South Korea, and India. If stolen copper enters the recycling supply chain in the U.S., it can end up in products sold in Asia, undermining legitimate businesses and creating legal risks for buyers.
Enforcement gaps
The National Association of Recycling Industries has called for stricter enforcement of existing laws. The industry group argues that without consistent oversight, honest recyclers are undercut by those who look the other way when suspicious material arrives at their yards. In 2024, the Arizona Attorney General’s office prosecuted three recyclers for knowingly purchasing stolen copper from data center sites.
The cases resulted in fines totaling $500,000. That prosecution sent a clear signal to the industry that state authorities are watching, but the Virginia audit suggests that enforcement remains uneven.
For families across Asia who depend on the recycling industry for their livelihoods, the crackdown is a double-edged sword. Legitimate recyclers face increased scrutiny and compliance costs, while those who flout the rules risk prosecution. The challenge for regulators is to separate the honest operators from the bad actors without choking off a vital supply chain.
The copper stolen from data center sites is not just a corporate problem. It represents lost tax revenue, higher insurance costs for construction projects, and ultimately higher prices for the electronics and infrastructure that rely on recycled copper.
For communities in the Philippines, Indonesia, and Vietnam where scrap processing is a major employer, the integrity of the supply chain matters deeply.
What to watch next
With AI data center construction continuing to surge, the demand for copper shows no signs of slowing. The ISRI data underscores the sheer scale of the market: 8 million tons of copper scrap processed in a single year, worth billions of dollars. That volume makes it nearly impossible for law enforcement to inspect every transaction.
The coming months will test whether the stricter enforcement called for by the National Association of Recycling Industries becomes reality. The Arizona prosecutions set a precedent, but the Virginia audit reveals the gap between the law on the books and the practices on the ground.
For recyclers across the United States, and for the Asian markets that buy their material, the stakes could not be higher.
