In the latest episode of The Diamond Dudes, industry veterans Rob Bates, Avi Krawitz, and Edahn Golan sat down to dissect the current state of the market. While the conversation was wide-ranging, the trio took a sobering look at the existential crossroads facing the lab-grown diamond (LGD) sector.
Many people still view LGD simply as “cheaper diamonds,” but the discussion made clear that much bigger forces are at play.
The “Cash Flow” Trap: Jewelry Is Just the Side Hustle
One of the most striking points raised during the discussion was the idea that many LGD growers increasingly see themselves as technology companies rather than traditional jewelry suppliers. The jewelry market, at least for now, serves as a vital source of cash flow to fund the massive R&D investments required to enter the technology and optics sectors.
As Golan explained, the ultimate goal for many producers is not necessarily a wedding ring, but advanced applications such as semiconductors, optics, or heat sinks for electronics.
“Until they reach the technological breakthroughs… they need cash flow,” Golan noted. “And the way to get cash flow is in the jewelry industry.”
That creates a fascinating dilemma. Growers are flooding the jewelry market to fund their tech ambitions, but in doing so, they are also fueling a race to the bottom on pricing that could eventually undermine the very business financing those ambitions.
The three also discussed comments previously made by Tom Chatham, who warned that the relentless decline in LGD wholesale prices may not be sustainable for growers. Consolidation among Indian producers, they noted, appears to be an attempt to slow the downward spiral.
LGDs HPHT vs. CVD Divide
For consumers, a lab-grown diamond is simply a lab-grown diamond. But behind the scenes, the economics are quite different.
The discussion highlighted the growing divide between the two main production methods: Chemical Vapor Deposition (CVD) and High Pressure High Temperature (HPHT).
According to Golan, the sub-one-carat market is now almost entirely dominated by HPHT production because it is significantly cheaper. HPHT rough currently trades around $10–$15 per carat, while CVD rough can run closer to $20–$25 per carat.
That cost advantage is driving enormous production volume at lower price points and rapidly turning smaller LGDs into a commodity product rather than a luxury item.
The Pandora Problem: Can You Sell a $2,000 “Budget” Brand?
The podcast also explored Pandora’s struggle to move upscale with LGDs.
Golan compared Pandora’s situation to the Japanese auto industry of the 1980s. Brands like Toyota eventually created Lexus because customers who bought affordable cars in their youth often did not want to continue buying from a “budget” brand as their income rose.
The same challenge may now face Pandora. Customers accustomed to spending $200 on charms may hesitate to spend $2,000 on diamond jewelry from the same retailer.
Without a “Lexus-style” repositioning by Toyota, the group suggested, lab diamonds risk remaining stuck in the low-cost tier of the market.
Krawitz pointed to another major issue: the lack of a structured midstream or dealer market for lab diamonds. Without that infrastructure, the industry struggles to develop unified pricing or coordinated marketing.
LGD Retail Challenges and the Search for Identity
Bates argued that many LGD brands have also become overly reliant on generic “eco-friendly” messaging. To create long-term value, he suggested brands need stronger design language, unique aesthetics, and clearer personalities.
The discussion also turned to the natural diamond side of the business, where mining companies face mounting pressure.
Mining Sector Pressures
Operations are increasingly challenged by weaker demand for lower-quality production, forcing companies to find ways to market goods that historically received less attention. Campaigns promoting off-color or imperfect stones, such as “Desert Diamonds,” were described not simply as branding exercises, but as economic necessities.
The group also discussed growing inventory accumulation among major producers like De Beers, as companies wait for pricing conditions that make smaller or lower-grade goods profitable to manufacture.
The Bottom Line
The industry is in the middle of a rapid and uncomfortable transformation.
Lab-grown diamonds may currently be financing a future centered on advanced technology rather than jewelry, while natural diamond producers are being forced to rethink supply, marketing, and consumer positioning at every level of the pipeline.
What became clear throughout the conversation is that both sides of the industry are searching for a sustainable identity in a market that no longer behaves the way it once did.
Podcast Availability
The Diamond Dudes podcast is available on major podcast platforms, with new episodes released monthly.
Follow, watch, listen, and subscribe on YouTube, Spotify, Apple Podcasts, Amazon Music, and more.
About The Diamond Dudes
The Diamond Dudes is a monthly podcast featuring leading diamond industry analysts Avi Krawitz, Rob Bates, and Edahn Golan. Combining decades of experience in journalism, market analysis, and data intelligence, the podcast delivers commentary and analysis on the key issues shaping the global diamond trade.
