Verizon has signed a deal with Google worth over US$1 billion to provide ‘dark fibre’ – that is, fibre-optic cables that the customer activates using its own equipment. The network is set to connect Google’s data centres. This news, coupled with an upward revision of financial forecasts, led to a rise of around 3 per cent in the operator’s share price.
The contract shows that it is not only chip manufacturers and cloud providers who are profiting from investments in artificial intelligence. AI models require the rapid transfer of vast amounts of data between data centres, which is why fibre-optic cables are becoming just as important a part of the infrastructure as processors. Google plans to spend US$195–205 billion on investments in 2026. In the second quarter, 40 per cent of its expenditure on technical infrastructure was allocated to data centres and network equipment.
For Verizon, this represents an opportunity for a new, long-term source of revenue outside the mature mobile telephony market. The company has announced further contracts that could generate several billion dollars. At the same time, it is improving the performance of its core business: in the second quarter, it gained 184,000 postpaid subscribers, and adjusted earnings stood at US$1.30 per share. Revenue, however, fell by 0.7 per cent to $34.3 billion, mainly because customers are replacing their phones less frequently.
Verizon has raised its full-year forecast for adjusted earnings to between $4.99 and $5.04 per share and expects free cash flow to grow by 9–10 per cent. The broader implication is that the AI boom is shifting some value towards the owners of physical networks. However, the benefits are not guaranteed. They require timely expansion, high reliability and cost control, whilst large contracts increase dependence on a handful of global customers.
