The Diamond Market Shifted This Month Because of AI. Most Jewellery Brands Haven't Noticed Yet.
- Jun 7
- 3 min read
The shares of two Chinese lab-grown diamond producers jumped 51% and 40% in a single week. Not because of a surge in engagement ring demand, not because of a celebrity, but because Nvidia announced its next-generation GPUs will use a diamond composite cooling solution. The same material in your jewellery pieces is now being bonded to AI chips. Diamond conducts heat five times more efficiently than copper, making it the most effective thermal management material available for high-density processors.
If you think these news stories belong only to the tech world and have nothing to do with your jewellery brand, you're wrong.
The Lab-Grown Price Story Just Changed Direction
For the past three years, lab-grown diamond prices have fallen hard and consistently. A 1-carat lab-grown diamond that cost around $3,400 in 2020 now retails for $750–$1,000. That is a 74% drop. Many independent jewellery brands built their entire proposition around this: same sparkle, same quality, a fraction of the price of mined.
That tailwind is shifting.
In March 2026, Chinese lab-grown diamond producers began voluntarily raising rough prices by roughly 15% — the first sustained reversal after years of decline. The reason is straightforward: the factories that grow diamonds for jewellery are the same ones now being asked to supply diamond heat spreaders to the semiconductor industry. When the same raw material serves two markets, supply tightens, and prices follow.
Industry analysts describe this as the market rescuing itself from a prolonged race to the bottom. The phase of "lab-grown gets cheaper every quarter" is likely over.
And Natural Diamonds Aren't Recovering Either
If you work with natural stones, the picture is different — but not more comfortable.
The Rapaport Diamond Index for 0.30-carat natural diamonds fell 20.3% across 2025. The 0.50-carat index dropped 26%. The only category showing stability is larger stones — 1.20 carats and above, particularly long fancy shapes — but that is a narrow slice of the independent jewellery market.
De Beers, meanwhile, has been selling discounted rough privately while maintaining official prices roughly 25% above market rate — a gap that became unsustainable and has since collapsed. The company is now being sold by Anglo American, with its production guidance cut significantly for 2026. There is no clear floor yet.
The AWDC put it bluntly:
"The diamond industry is experiencing a severe global crisis. Weak consumer markets and competition from synthetic diamonds are leading to historically low demand for natural diamonds, resulting in rock-bottom prices."
What This Means in Practice for Jewellery Brands
Two things are happening simultaneously — and they pull in opposite directions depending on what your brand is built on.
If your brand is built on affordable lab-grown diamonds, the price argument that made your positioning easy is narrowing. Rough costs are rising. The "same stone for less" story still holds versus natural, but the margin between lab-grown suppliers is compressing. Brands that used price as the primary differentiator will feel this first.
If your brand works with natural diamonds in smaller sizes, the small goods market — under 1 carat — is the most disrupted category right now, facing both falling resale perception and direct competition from lab-grown. Melee stones and commercial-quality small rounds are under the most pressure.
If your brand leads with design, craft, and story — rather than the material's price point — this market shift matters less to your positioning. The volatility in commodity pricing affects brands whose value proposition is the stone. Brands whose value proposition is what they do with it are less exposed.
The synthetic diamond market is projected to reach USD 44.8 billion by 2035. Lab-grown is not going away. But the market is maturing — and maturing markets reward brands with a clear identity over brands with the lowest price.
This Is the Kind of Shift That Quietly Restructures an Industry
Most jewellery brand owners are not watching the semiconductor supply chain. Why would they? But this is precisely the type of upstream change that reshapes procurement costs, customer expectations, and competitive positioning — without announcing itself clearly until it has already happened.
We write about these shifts as they develop — what they mean for independent jewellery brands specifically, and how to read market signals that rarely make it into jewellery trade press in plain language. For more news and analytics, subscribe to our Jewellers' Intelligence Brief Newsletter.
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