Inside the Rising Threat of Lab-Grown Diamonds

Once the ultimate symbol of luxury, diamonds are facing an identity crisis—and De Beers, the industry giant that famously coined the slogan "A Diamond is Forever," finds itself on the defensive. CEO Al Cook describes a "huge con" at play, as lab-grown diamonds—chemically identical to those sourced from the earth—flood the market at a fraction of the price. What was once a niche novelty now dominates big-box jewelry counters: Walmart's diamond assortment is now half synthetic, and more than half of US engagement rings in 2023 featured a lab-created stone.

The shift is upending the economics of an industry De Beers once controlled. Synthetic stones have gone from less than 1% in 2016 to over 20% of global diamond jewelry sales, an industry analyst tells the Wall Street Journal. The price gap has widened dramatically: a 1-carat lab-grown diamond now sells for about $745, while a natural counterpart fetches nearly $4,000. The Journal notes the delta between the two was only about $1,000 in 2016, but as lab-grown versions have gotten cheaper, natural diamonds have increased in price.

As consumer attitudes shift—some buyers see little downside in choosing size and value over rarity—De Beers is doubling down on the mystique of mined diamonds. Cook has shuttered De Beers' own lab-grown jewelry production, expanded marketing efforts that play up the value of "natural diamonds," and is pushing jewelers to purchase a new $9,500 diamond-testing device that's meant to sit on shop counters and show shoppers in seconds whether a stone is genuine or lab-made (or requires more testing). That's hit De Beers hard: Diamond World in April reported De Beers logged $520 million in revenue for Q1, down 44% from $925 million in Q1 of 2023.

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Still, the democratization of diamonds raises tough questions: Will mined stones retain their cachet, or will they eventually be treated like collector's items while lab-grown gems become everyday wear? For now, De Beers is gambling that the story—and scarcity—of natural diamonds can lure buyers back.