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The artificial intelligence (AI) demand for infrastructure is impacting the automotive sector's profit margins, with Maruti Suzuki India reporting a decline in operating profit margins to 8.1% for Q3 FY 2026, down from 8.4% the previous quarter. The company attributed 60 basis points of this decline to rising commodity prices, particularly aluminium and copper, driven by competition from AI-driven demand.

Hyundai Motor India cited increased input costs leading to a price rise in its model range starting January 1. The surge in AI infrastructure is intensifying the demand for copper and aluminium, which are essential for vehicle manufacturing and electrification.

UBS analysts warned that AI data centres could disrupt vehicle production due to a shortage of dynamic random-access memory (DRAM) chips, as manufacturers prioritize AI contracts. Global electricity demand is projected to increase by nearly 50% by 2040, with significant growth anticipated in India and China.