Verizon has signed an AI infrastructure deal worth more than $2 billion with Amazon Web Services, the company said on Monday, as demand for connectivity to power artificial intelligence workloads turns the carrier’s fiber network into a growth business.
Under the deal, Verizon will provide high-capacity fiber-optic connectivity for AWS data centers, enabling faster and more reliable data transfers to support growing AI computing workloads. The agreement was announced alongside Verizon’s third-quarter results, in which the carrier raised its annual forecast for wireless subscriber additions.
“Verizon will provide high-capacity fiber-optic connectivity for AWS data centers, enabling faster, more reliable data transfers to support growing AI computing workloads,” Reuters reported, citing the company’s announcement.
A Second Fiber Deal in Three Months
The AWS agreement follows a similar move in July, when Verizon announced a deal worth more than $1 billion with Google to connect data centers using dark fiber. Together, the two agreements show how rising AI demand is opening a new revenue stream for telecom operators beyond traditional wireless and broadband services.
Data centers training and running large AI models need enormous amounts of bandwidth between facilities, and carriers that own fiber routes between major data center hubs are in a strong position to sell it. Verizon’s bet is that AI infrastructure spending, which has already reshaped the chip and cloud markets, will now flow into connectivity as well.
Graphic: GPTOnline
Strong Subscriber Numbers
The deal came with a better-than-expected quarter for Verizon’s core wireless business. The carrier reported 406,000 postpaid phone additions in the third quarter, nearly double the analysts’ estimate of 209,439, according to Visible Alpha. Shares rose 2.4% in premarket trading.
Verizon now expects to add between 1.1 million and 1.2 million postpaid phone subscribers this year, up from an earlier forecast of 750,000 to 1 million, and raised its full-year adjusted earnings per share forecast to $5.04 to $5.06, from $4.99 to $5.04.
Third-quarter revenue of $34.3 billion fell short of analyst estimates of $34.74 billion, according to LSEG data, pressured by lower device upgrade volumes as customers held on to their phones longer after Verizon began cutting device subsidies.
Graphic: GPTOnline
Why It Matters
The AWS deal is a sign that the AI buildout is spreading beyond chips and cloud servers into the physical networks that connect them. For Verizon, a year into chief executive Dan Schulman’s tenure and in the middle of a broad overhaul that included the Simplicity plan launched in June, fiber for AI data centers offers growth that does not depend on selling more phone plans.
For AWS, the agreement secures dedicated high-capacity links as it races to add computing capacity for AI customers. As data center clusters grow larger and more power-hungry, the fiber between them is becoming as strategic as the servers inside them.
