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Lab-grown-diamond makers are coming for De Beers

The diamond giant is about to learn the hard way whether lab-grown rocks will destroy its business.

1/7/25 2:07PM

One of the more interesting trends over the past few years (outside meme stocks, Silicon Valley’s shifting political views, and the like) has been the emergence of lab-grown diamonds. I’d heard about them before, but the story that really put them on my radar was an interview with Meg Strachan, the founder and CEO of lab-grown-diamond business Dorsey, in Emily Sundberg’s newsletter, Feed Me.

The TL;DR is that six years ago, nobody thought lab-grown diamonds would be a big business, as demonstrated by Strachan’s inability to raise outside capital for her business because of investor concerns about how big its market size could be. Today, that market is projected to be almost $50 billion by the end of the decade. So, yeah, lab-grown diamonds became a big deal, quickly.

Improvements in manufacturing technology have brought costs down, and those costs have translated to lower prices for consumers. Now, downward pricing pressure from lab-grown diamonds appears to be affecting the prices of “natural” diamonds, too. From The Wall Street Journal:

“After a postpandemic surge in demand in 2021 and 2022, natural-diamond prices are down about 8% compared with the first quarter of 2020, while lab-grown diamond prices are down 75%, according to data from diamond-industry analyst Paul Zimnisky…
Consumers in the U.S., the largest diamond market, are happily opting for bigger and cheaper lab-grown diamond options over mined ones. Natural-diamond jewelry sales in the U.S. declined 0.7% through November compared with a year earlier, while lab-grown diamond-jewelry sales rose 12.5%, according to industry analyst Edahn Golan.
In a 2024 survey of U.S. consumers by the Knot, an online wedding-planning platform, more than half of respondents said their engagement rings featured a lab-grown diamond as a center stone, up from 46% in 2023 and 12% in 2019. Lab-grown diamonds have nearly the same chemical, optical and physical properties as natural diamonds, which means the naked eye can’t detect any differences, according to the Gemological Institute of America.”

Through the 20th century, De Beers had a near monopoly on the world’s diamond supply, and while its market share has decreased in the 21st century, the company has so far benefited from marketing campaigns that have helped it keep diamond prices high. But lab-grown diamonds could pose a serious problem for the diamond industry, in that they provide a virtually identical product for a fraction of the price, and those prices keep dropping.

If you buy a knock-off Rolex on Canal Street in New York, it’s not really a Rolex. It’s lighter, the materials are cheap, and anyone with a Rolex can instantly tell it’s fake. But a lab-grown diamond has the same chemical composition, physical properties, and optical properties of “natural” diamonds. The only difference is their source. Basically, the only force keeping so-called natural diamonds’ prices up is consumer perception, and De Beers is hoping that lab-grown prices fall so far that consumers view them as totally different (read: “cheaper”) products. In fact, De Beers is trying to push this narrative through its own lab-grown subsidiary, Lightbox, which sells at below-market prices.

“Miners like De Beers are hoping that the widening price gap for the lab-grown variety will naturally lead consumers to consider them a completely different category, not a substitute. The miner’s lab-grown diamond subsidiary Lightbox has been known to offer lower-than-market prices. In an announcement last year, Sandrine Conseiller, chief executive officer of De Beers brands, said: ‘The price difference between natural and lab-grown diamonds at retail is growing fast, accelerating consumer awareness that they are fundamentally very different products.’
That race to the bottom could eventually fulfill De Beers’ hope of making lab-grown diamonds so cheap that they become a completely different category. Theoretically, if retail margins on lab-grown diamonds fall to natural-diamond levels, the price of a high-quality 1-carat lab diamond could retail for as low as $275, Zimnisky notes. That compares with about $4,200 for an equivalent natural diamond.”

The De Beers argument makes sense: if your options are a $10,000 “natural” diamond ring and a $4,000 lab-grown diamond ring, you’ll probably choose the $4,000 ring. They both feel premium, but one is less costly. If your options are a $10,000 natural diamond ring or a $400 lab-grown diamond ring, you’ll probably choose the $10,000 ring, because it feels like a premium product instead of a more expensive version of the same product. No one wants to be the guy who was cheap on their engagement ring.

The flip side, of course, is the opportunity for lab-grown diamonds to be marketed as “environmentally friendly” or “better for human rights” or whatever. That being said, I think De Beers’ “completely different category” will eventually win out. If lab-grown diamonds drop to $300, do you really think your soon-to-be wife will be happy knowing she was only “worth” $300, when her friends got $10,000-plus rings? No.

Vanity is an incredible moat.

Max Knoblauch16h

The Trump administration is reportedly planning a 50% made-in-America requirement for USMCA tariff relief

Qualifying for USMCA-related lower tariffs may soon require more US-made vehicle components, according to reporting by The Wall Street Journal.

The Trump administration is reportedly planning to introduce a 50% US content requirement for vehicles covered by the trade pact to receive lower tariffs. The content would be measured by cost, according to the WSJ.

There currently isn’t any US-specific requirement for those lower tariff rates, but in order to receive preferential tariffs, vehicles are must contain at least 75% regional content (components made in North America). Per Reuters reporting, the Trump admin is seeking to raise the regional requirement to 82%.

These reported plans are subject to change as the US negotiates USMCA terms with Mexico over the next few months.

Overall, Tesla will likely have the easiest time qualifying for any stricter requirements. The automaker’s vehicles contained the highest amount of US/Canadian content in 2025, according to American University research. Ford, GM, and Stellantis all scored lower.

Notably: the underlying government data that many domestic content measurements rely on intentionally combines US and Canadian components, so it’s difficult to know exactly how much of any given vehicle is specifically US-made.

Exclusive | Trump Administration Wants Autos Under USMCA to Be at Least 50% Made in America

These reported plans are subject to change as the US negotiates USMCA terms with Mexico over the next few months.

Tom Jones22h

The $640,000 Luce makes the average Ferrari look like a bargain

Put aside the shape; put aside the smoothing out of Ferrari’s iconic sharp edges; put aside, even, the calls from former Chairman and President Luca Cordero di Montezemolo to “take the Prancing Horse off.” On the grounds of price alone, Luce detractors might have a point.

By now, many of us will have read the criticisms of Ferrari’s first fully electric vehicle, as the Luce — which was unveiled to the world earlier this week and promptly saw the company’s shares crash out in New York and Milan — gets subtly shaded by competitors online and not-so-subtly shaded by basically everyone else.

What makes all of this worse for Ferrari is that, even by the luxury car maker’s notoriously high standards, they’ve slapped a pretty hefty price tag on the Luce, and the company’s CEO, Benedetto Vigna, has already been forced to defend the €550,000 ($640,000) price point, saying yesterday that it’s “fair to pay for innovation,” per Reuters.

While Ferrari’s cars have been getting more expensive of late, as recently as 2022, Ferrari’s average revenue per car sold was around $340,000. At nearly twice that price, this new electric model is obviously proving a little much (visually, conceptually, and financially) for many loyal and long-standing fans of the Prancing Horse to stomach.