fiber optics
Goldman Sachs report: Optical Networking is the next mega trend in AI infrastructure
Goldman Sachs analysts forecast a $154billion opportunity in optical networking driven by skyrocketing capacity demands from hyperscale cloud and AI workloads. Carriers and vendors are integrating 10GbE edge networking and AI-RAN (Artificial Intelligence Radio Access Network) trials on live 5G networks.
Goldman argues that AI infrastructure is creating a networking bottleneck phase, where optical interconnects become essential to connect more chips, keep latency low, and let AI clusters scale efficiently. The total optical networking market forecast 9x increase to $154 billion is due to both scale-up and scale-out AI data center architectures grow.
AI compute gains are no longer just about faster GPU and HBM chips; they depend on moving data fast enough between chips, racks, and super-nodes. Goldman Sachs emphasizes that networking now “unlocks computing capability” by enabling seamless exchange across multiple AI chips, which is exactly where copper-based links start to fall short. That makes fiber-optic connectivity, pluggable optics, and co-packaged optics central to the next phase of AI build-out. The report splits opportunity across scale-up and scale-out networking, plus component categories such as copper cables, pluggable optical modules, CPO, and PCB midplanes.
External coverage of this report says Goldman Sachs sees scale-up as the larger pool, about $106 billion or 69% of the $154 billion TAM, while CPO could represent about $91 billion or 59% of the total, assuming 29% penetration in scale-out networking. In practical terms, the report is signaling that the highest-value optical opportunity sits inside tightly coupled AI systems, not just in long-haul or metro transport.
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Goldman projects the following:
- Dollar content increase by 16x / 45x in Scale Out / Scale Up per computing unit from GB300 NVL72 (per computing unit means 72 GPUs per rack to reach NVL72) to Rubin Ultra NVL576 (per computing unit means 72 GPUs per rack, and 8 racks together to reach NVL576), with opportunities across pluggable optical modules, optical engines in CPO, copper cables, and PCB midplanes.
- A 13x larger addressable market for optical modules / optical engines expanding from scale out (e.g. GB300 NVL72) to scale up (e.g. Nvidia Rubin Ultra [1.] NVL576 level 2 scale up via CPO) per computing unit. n
- A 10x larger value market for pluggable optical modules in scale out per computing unit from GB300 NVL72 to Rubin Ultra NVL576, even with a 29% CPO penetration rate. The numbers of pluggable optical module (1.6T equivalent) per computing unit would increase from 216 units in GB300 NVL72 to 2.5k units in Rubin Ultra NVL576.
Note 1. Nvidia Rubin Ultra is a flagship, next-generation AI and high-performance computing (HPC) processor succeeding the standard Rubin architecture. Scheduled to debut in late 2027, it utilizes massive multi-die chiplet designs and unprecedented memory configurations to power the next wave of generative and agentic AI.
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Market Forecasts:
The investment bank expects the aggregate dollar content per computing unit across scale up and scale out to increase by 29x from US$315k in GB300 NVL72 to US$9.4bn in Rubin Ultra NVL576, and assuming the numbers of racks through the full product cycle are 48k racks for GB300 NVL72, and 16.5k computing units for Rubin Ultra NVL576, the aggregate value TAM across scale up and scale out would increase by 9x from US$15bn in GB300 NVL72 (mainly in 2026) to US$154bn in Rubin Ultra NVL576 (mainly in 2028).
Among the US$154bn value TAM, 69% goes to scale up, or US$106bn, and CPO contributes US$91bn, or 59% of the US$154bn value TAM, assuming CPO at 29% penetration rate in scale out.
For network architects, the important takeaway is that AI clusters are becoming optics-heavy at more layers of the network stack, not just at the edge of the rack. The likely winners are suppliers that can reduce power, improve density, and simplify packaging for very high-bandwidth links, especially around CPO and advanced pluggables. This is less a story about traditional telecom optics and more about datacenter interconnects optimized for GPU fabrics and AI training/inference throughput.
The most consistently cited “top beneficiaries” are Coherent, Lumentum, and Fabrinet. These companies sit close to the core optical component modules and manufacturing layers that scale with higher AI interconnect demand. That makes them the most straightforward proxies for the forecasted optics expansion. The report’s thesis favors companies with strong exposure to high-end optical transport, coherent optics, and data-center interconnect rather than the broader optical networking/PON equipment companies like Ciena, Nokia/Infinera, Cisco/Acacia, ADVA, or Calix.
Conclusions:
Strategically, Goldman Sachs maintains that optical networking is no longer a niche enabling layer; it is becoming a core enabler of AI capex scaling. That shifts investor attention toward optical component vendors, silicon photonics, transceiver suppliers, and adjacent packaging ecosystems. The report’s core message is simple: as AI clusters grow, the network fabric becomes a first-order constraint, and optics are the most likely answer.
References:
2026 Fiber Connect Keynote: “The Future of Fiber Optics: AI and the Quantum”
How will fiber and equipment vendors meet the increased demand for fiber optics in 2026 due to AI data center buildouts?
Big Fiber’s $250M financing deal to buildout dark fiber routes for AI Data Center expansion
Analysis: Fiber Broadband Association (FBA) whitepaper: Upgrading MSO Networks to Fiber to the Home (FTTH): A Technical Perspective
Fiber Optic Boost: Corning and Meta in multiyear $6 billion deal to accelerate U.S data center buildout
Fiber Optic Networks & Subsea Cable Systems as the foundation for AI and Cloud services
AI infrastructure investments drive demand for Ciena’s products including 800G coherent optics
DriveNets and Ciena Complete Joint Testing of 400G ZR/ZR+ optics for Network Cloud Platform
2026 Fiber Connect Keynote: “The Future of Fiber Optics: AI and the Quantum”
Dr. Michio Kaku’s 2026 Fiber Connect keynote, “The Future of Fiber Optics: AI and the Quantum,” kicked off the inaugural AI & Emerging Technology Infrastructure Summit on Wednesday, May 20,2026.
As a theoretical physicist and futurist, Dr. Kaku delivered a high-altitude roadmap framing fiber optic networks not merely as faster telecom pipes, but as the mandatory foundation for a world defined by concurrent, multi-cloud AI infrastructure and quantum mechanics.
Kaku described the convergence of AI, quantum computing, and fiber infrastructure as a critical shift toward an AI-native, quantum-enabled internet essential for national competitiveness. Kaku emphasized that fiber optics are necessary to facilitate “quantum AI” by handling high-density, low-latency data movement, moving beyond traditional networking to support exponential computing advancements.
Key Takeaways:
- Fiber as the Foundation for AI: Dr. Kaku explained that massive data sets and hyperscale AI computations cannot run efficiently over wireless or legacy networks. Fiber’s near-limitless bandwidth and sub-millisecond latency are required to process these workloads in real-time.
- The Quantum Computing Leap: He detailed how quantum networks—which compute at the atomic level—will redefine security and processing power. He emphasized that quantum data requires the stability, security, and bandwidth that only fiber optics can provide.
- National Competitiveness: Dr. Kaku framed fiber broadband as a strategic national asset. He argued that a region’s ability to evolve into an AI-native economy depends directly on robust fiber infrastructure to secure future healthcare, financial, and climate innovations.
- The “Thinking Economy”: He projected that networks are evolving to do more than just transport data. They will increasingly support “thinking economies” where intelligence moves instantly between edge computing centers, end-points, and the cloud.
The presentation and subsequent fireside chat with quantum computing firm IonQ offered several critical technological dimensions and actionable industry analysis:
The Physics of the “AI Triad” (Compute, Quantum, & Photonics):
Kaku mapped out how classical silicon-based computing is approaching its physical limits (thermodynamics and transistor gating). He explained that the future relies on a three-pronged convergence:
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- AI Models: The brain processing the logic.
- Quantum Computing: The hyper-accelerator solving atomic, chemical, and multi-variable optimization issues.
- Optical Fiber: The unified nervous system. Quantum and distributed AI workloads cannot scale on traditional copper networks because they require absolute determinism, zero-jitter latency, and near-limitless bandwidth.
Upgrading to a Quantum-Ready Internet:
Drawing from themes in his book Quantum Supremacy, Kaku noted that the move toward a quantum-enabled web alters the physical network topology. Operators must plan for physical security layers (like Quantum Key Distribution) and data transmission methods that preserve quantum entanglement across distances.
–>Fiber is the only media capable of transporting light photons over vast geographies without disrupting these states.
The Power and Cooling Crisis:
A significant focus of the analysis was the staggering energy footprint of next-generation AI factories and hyper-scale data centers. Kaku noted that moving data electronically creates heat resistance. Shifting toward all-optical (photonic) networks and in-rack fiber interconnects removes electronic bottlenecks, drastically reducing the power required to pass massive datasets between distributed data centers
Strategic Implications for Network Operators:
During the fireside chat, the discussion moved from theoretical physics to immediate business strategy and tactics:
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- National Competitiveness: Bandwidth, latency, and optical infrastructure are the new benchmarks for a country’s economic power.
- Capacity Planning: Network planners must shift from estimating consumer download speeds to calculating the throughput required for real-time, stateful AI agents and machine learning inference workloads operating at the network edge.
FBA Panel and Summit Sessions:
Following Kaku’s opening address, the Fiber Broadband Association (FBA) hosted deep-dive industry panels that put these physics concepts into operator terms:
- The Open Compute Project (OCP): Discussed open-source hardware standards for in-rack photonics to support massive AI clustering.
- Multi-Data-Center Architectures: Network engineers mapped out how dense dark fiber rings are being laid to link secondary edge facilities, allowing enterprises to run heavy inference closer to end-users without overwhelming backbone networks.
- AI data center speed and power requirements are transitioning towards 800 Gbps–1.6 Tbps node-to-node networking and gigawatt-scale power to handle distributed generative AI workloads.
- High rack densities up to 240 kW require advanced liquid or immersion cooling, with optical technologies being introduced to reduce heat generation.
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References:
https://fiberconnect.fiberbroadband.org/about/whats-new/
Analysis: Fiber Broadband Association (FBA) whitepaper: Upgrading MSO Networks to Fiber to the Home (FTTH): A Technical Perspective
Fiber Broadband Association Middle Mile WG: how to use “Digital Infrastructure Networks” for coordinated fiber backbone investments
Analysis: AT&T 1Q-2026 results: increased fiber penetration, FWA momentum, D2D deals, and mobile/home internet bundles
Fiber Optic Boost: Corning and Meta in multiyear $6 billion deal to accelerate U.S data center buildout
Fiber Optic Networks & Subsea Cable Systems as the foundation for AI and Cloud services
How will fiber and equipment vendors meet the increased demand for fiber optics in 2026 due to AI data center buildouts?
Automating Fiber Testing in the Last Mile: An Experiment from the Field
AI wireless and fiber optic network technologies; IMT 2030 “native AI” concept
Big Fiber’s $250M financing deal to buildout dark fiber routes for AI Data Center expansion
Executive Summary:
Big Fiber [1.] has secured $250 million in financing from Stonepeak and Caisse de dépôt et placement du Québec (CDPQ) to expand its dark fiber footprint and increase network capacity in response to accelerating hyperscaler and large-scale data center investments in AI-driven workloads.
Note 1. Sunnyvale, CA headquartered Big Fiber was previously known as Bandwidth IG, which was originally established in 2019 as a telecom and dark-fiber infrastructure company. The rebrand to BIG Fiber was announced on May 1, 2025 when the company described it as a shift to better reflect its focus on privately owned, newly constructed dark fiber networks. The company has built privately owned metro dark fiber networks from its inception, primarily in the SF Bay Area and the Greater Portland, OR and Atlanta, GA areas.
BIG Fiber structures its dark fiber portfolio around high‑strand‑count, single‑mode, low‑loss fiber deployed in purpose‑built, underground metro and regional routes, rather than a carrier‑specific “technology” stack of its own. The company’s public materials emphasize:
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Single‑mode fiber (SMF) for metro and long‑haul connectivity, consistent with standard dark‑fiber infrastructure designed for multi‑wavelength and DWDM‑based upgrades.
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High‑density, high‑fiber‑count cables in metro corridors (often hundreds of strands) to support dense data‑center and interconnect demand, which is typical of “new‑build” dark‑fiber operators entering AI‑and‑cloud‑centric markets.
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Point‑to‑point and ring‑style topologies engineered for extreme route diversity (tri‑/quad‑versity) and low latency, rather than a legacy long‑haul backbone that relies on older fiber types or managed wavelengths.
To complement Big Fiber’s dark‑fiber infrastructure; the customer provides the optical PHY layer (e.g., coherent DWDM, 400ZR/ZR+, or other high‑speed optics), which is how dark‑fiber providers typically position their offerings.
–>More about Big Fiber at the end of this article from the company itself.
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Proceeds of the facility will be used to refinance existing debt, provide new capital and facilitate the necessary headroom for major fiber optic network expansions already underway. This includes a significant multi-market buildout in Greater Atlanta, adding over 205 route miles and 165,000 fiber miles to BIG Fiber’s existing market-leading footprint.
“Our partnership with Stonepeak Credit and La Caisse marks a pivotal moment in our mission to empower our customers with highly scalable and purpose-built dark fiber solutions,” said Bruce Garrison, CEO of BIG Fiber. “This financing ensures we have the scale to stay ahead of the escalating demand for modernized infrastructure enabling the AI ecosystem and the necessary digital highways for decades to come.”
“BIG Fiber’s infrastructure delivers critical bandwidth to meet the insatiable demand for both data and compute capacity across its key markets,” said Arun Varanasi, Managing Director at Stonepeak Credit. “We are proud to partner with Columbia Capital, SDC Capital Partners, and La Caisse to support the company’s next leg of growth as it positions itself as one of the preeminent dark fiber operators in the country.”
“BIG Fiber is well positioned to meet the growing connectivity needs of enterprises and data centers seeking new, high-quality infrastructure options,” said Jérôme Marquis, Managing Director and Head of Private Credit at La Caisse. “Its resilient business model, underpinned by long-term contracts and strong structural demand, positions the company well for growth. Together with Stonepeak Credit, we’re providing a tailored financing solution that supports the continued buildout of essential digital infrastructure.”
The latest expansion will bring BIG Fiber’s Atlanta and San Francisco Bay Area network capacity to 850 route miles and over 3 million fiber miles. Projects are currently under construction or contract, with phased Ready for Service (RFS) dates expected in early 2027.
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According to Big Fiber Chief Commercial Officer Patton Lochridge, demand signals are particularly strong in key U.S. metros including the San Francisco Bay Area, Hillsboro, and Atlanta, where new fiber routes are being deployed to support AI-centric data center expansion. “We’re seeing customers require extreme route diversity, often moving toward triversity or quadversity networks to connect metro assets and long-haul routes,” Lochridge said. He added that inference workloads are increasing the demand for dense metro connectivity: “Traditional telecommunications networks are often too congested or lack the latency and loss tolerances required for stringent AI workloads, making purpose-built metro fiber essential.” Lochridge indicated that the majority of the new capital will be directed toward greenfield build-outs and targeted overbuilds of “exhausted legacy telecommunications corridors that need more scale.”
Industry analysts highlight a parallel geographic shift in AI infrastructure deployment. Sterling Perrin, senior principal analyst for optical networks and transport at Omdia, noted that AI campuses are expanding beyond traditional connectivity hubs such as Ashburn, Dallas, and Northern California into power-advantaged regions including West Texas, Ohio, Tennessee, Louisiana, and Georgia. “They all require massive fiber optic connectivity,” Perrin said.
Power availability is emerging as a primary constraint shaping network topology. Ron Westfall, vice president and analyst at HyperFrame Research, emphasized that grid limitations are driving hyperscalers toward distributed AI campus architectures interconnected via metro and long-haul dark fiber. “Power grid constraints have forced a material shift toward metro and long-haul dark fiber infrastructure to stitch together distributed regional data center campuses,” Westfall said. “Because this relentless GPU-to-GPU communication demands near-zero latency and unprecedented bandwidth, infrastructure planners are prioritizing the deployment of ultra-high-strand dark fiber corridors that directly link distributed, power-rich data centers.”
AI Workloads Reshape Optical Demand:
AI-driven traffic growth is now materially impacting the optical supply chain. In its April 2026 post-OFC analysis, CRU Group reported that AI-related data center demand “has overtaken traditional telecom as the primary growth engine for optical [fiber] and cable,” contributing to tightening supply conditions for high-fiber-count cables and upstream preform materials.
Despite this surge, the majority of AI traffic remains intra-data-center. Omdia estimates indicate that up to 90% of AI traffic does not exit the facility during GPU cluster operations. However, the emergence of distributed AI architectures is beginning to increase requirements for high-capacity inter-data-center interconnect (DCI).
At the Optica Executive Forum, Cisco SVP and Fellow Rakesh Chopra highlighted the scale differential between AI and conventional traffic profiles. As cited by Perrin, AI “scale-up” traffic within data centers can generate 504 times more traffic than traditional DCI flows, while “scale-out” traffic can produce 56 times DCI bandwidth requirements. “With AI training models at the limits of what can be processed within a data center, distributed AI clusters are inevitable,” Perrin said.
This architectural transition is reflected in NVIDIA’s AI factory designs, which decouple east-west GPU compute traffic from traditional north-south enterprise flows, leveraging low-latency leaf-spine topologies optimized for continuous GPU synchronization.
Westfall further noted that these evolving traffic patterns are fundamentally altering network design assumptions. Operators are increasingly optimizing for persistent machine-to-machine synchronization rather than burst-oriented enterprise traffic models.
Fiber as a Core AI Infrastructure Asset:
The Big Fiber’s latest financing aligns with broader trends in AI infrastructure investment, where capital is being deployed across integrated stacks including energy, land, connectivity, and compute infrastructure. Utilities are expanding transmission capacity, while developers are co-locating generation resources near emerging AI hubs.
Within this context, fiber infrastructure is being revalued based on its strategic proximity to power-rich data center clusters. “Infrastructure monetization is shifting away from historical metrics such as per-megabit pricing toward asset-level valuations built around proximity to power-rich data centers,” Westfall said.
If current deployment trajectories persist, the resulting topology will consist of a dense, high-capacity mesh of metro and long-haul fiber routes interconnecting geographically distributed, power-optimized AI campuses with hyperscale cloud and interconnection ecosystems.
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About BIG Fiber:
BIG Fiber is a metro dark fiber provider that offers high capacity, strategically placed, dark fiber networks to mission critical data centers, Hyperscalers and enterprises throughout the San Francisco Bay Area, Greater Portland and Greater Atlanta areas. BIG Fiber’s 100% underground network meets critical data needs for enterprises and data centers that require new, quality infrastructure options. BIG Fiber’s San Francisco Bay Area network offers more than 320 route miles and 65 data centers. The Greater Portland network has more than 20 route miles and 15 data centers, and the Greater Atlanta network has more than 550 route miles and 30 data centers. BIG Fiber was founded in 2019 and is headquartered in Sunnyvale, California. Visit www.bigfiber.com to learn more.
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References:
BIG Fiber Secures $250 Million Financing Led by Stonepeak Credit and La Caisse
Analysis: Fiber Broadband Association (FBA) whitepaper: Upgrading MSO Networks to Fiber to the Home (FTTH): A Technical Perspective
Fiber Broadband Association Middle Mile WG: how to use “Digital Infrastructure Networks” for coordinated fiber backbone investments
Analysis: AT&T 1Q-2026 results: increased fiber penetration, FWA momentum, D2D deals, and mobile/home internet bundles
Fiber Optic Boost: Corning and Meta in multiyear $6 billion deal to accelerate U.S data center buildout
Fiber Optic Networks & Subsea Cable Systems as the foundation for AI and Cloud services
How will fiber and equipment vendors meet the increased demand for fiber optics in 2026 due to AI data center buildouts?
Automating Fiber Testing in the Last Mile: An Experiment from the Field
AI wireless and fiber optic network technologies; IMT 2030 “native AI” concept
Analysis: Fiber Broadband Association (FBA) whitepaper: Upgrading MSO Networks to Fiber to the Home (FTTH): A Technical Perspective
Executive Summary:
The Fiber Broadband Association (FBA) has published an economic and structural framework for Hybrid Fiber Coax (HFC)-to-Fiber to the Premises (FTTP) [1.] upgrades, viewing that as a ‘strategic imperative’ for cable network operators (MSOs). FBA’s The whitepaper white paper, “Upgrading MSO Networks to Fiber to the Home (FTTH): A Technical Perspective,“ positions fiber as the long-term architectural solution for cable access networks.
The whitepaper evaluates multiple migration paths—including full overbuilds, targeted deployments, and HFC/FTTP coexistence—alongside passive optical network (PON) options and operating models. Economically, the report estimates FTTP operating expenses to be approximately 50% lower than HFC, driven by the elimination of active outside plant components. It outlines deployment options ranging from incremental overlays to full HFC replacement, each with distinct cost-performance trade-offs.
Note 1. Fiber optic access networks (sometimes referred to as fiber-to-the-home—FTTH—or fiber-to-the-premises—FTTP) are built to connect homes and businesses to lightning fast Internet connections. The fiber optic cables that make up these networks are the fastest and most reliable broadband technology and are capable of delivering vastly higher bandwidth than traditional copper wires or wireless. All-fiber networks are directly connected from the central office all the way to a subscriber’s building. There is no other technology along the path except fiber optics.
Fiber optic cables are made up of thin strands of glass that carry information by transmitting pulses of light, which are usually created by lasers. The vibrations are turned on and off very quickly. A single fiber can carry multiple streams of information simultaneously over different wavelengths, or colors, of light, enabling more robust video, Internet, and voice services. Fiber cables are capable of transmitting multi-gigabit Internet speeds compared to the mere megabytes typical of copper connections.
Image Credit: Panther Media GmbH/Alamy Stock Photo
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Divergent Cable Operator (MSO) Strategies:
In practice, MSO upgrade strategies remain highly variable, shaped by market competition, plant condition, density, and capital constraints. Most large operators now manage hybrid access portfolios spanning HFC, FTTP, and, in some cases, fixed wireless access (FWA).
Optimum Communications, for example, is deploying FTTP overlays in dense Northeastern markets while relying on DOCSIS 3.1 in rural areas where fiber economics are less favorable.
Comcast and Charter similarly pursue selective FTTP in greenfield and edge-out scenarios but continue to prioritize HFC evolution via DOCSIS 4.0. Both assert that upgraded HFC can deliver symmetrical multi-gigabit services at lower cost. Charter estimates upgrade costs at approximately $100 per home passed (excluding CPE), versus roughly $200 for Comcast. Both operators utilize virtualized CMTS platforms and distributed access architectures (DAA) to support converged HFC/FTTP operations and targeted fiber extensions.
Operational cost differences remain contested. Charter CEO Chris Winfrey characterized the delta as minimal—on the order of one to two dollars per passing—stating, “We’ll take that tradeoff any day.” This reinforces the view that large-scale HFC-to-FTTP overbuilds are unlikely among major incumbents in the near term.
HFC investment also continues. Comcast and Charter are deploying low-latency capabilities based on the IETF Low Latency Low Loss Scalable Throughput (L4S) standard, with Charter already launching in multiple U.S. markets.
Fiber-First Deployments:
Smaller operators are, in some cases, moving more decisively toward FTTP. MCTV, serving approximately 57,000 customers in Ohio and West Virginia, determined that FTTP and DOCSIS 3.1 were cost-comparable and opted for full fiber rebuilds. The operator now passes more than 80% of its footprint with FTTP and has decommissioned roughly two-thirds of its HFC power supplies.
Competitive and Technology Outlook:
The FBA identifies FTTP as the “primary driver” of recent cable subscriber losses, citing “structural limitations” of HFC in symmetry, latency, and scalability “that DOCSIS upgrades can partially address but not fully overcome.” Cable proponents dispute this, pointing to DOCSIS 4.0 and future enhancements.
However, competitive pressure is multi-dimensional. In addition to fiber, FWA is gaining traction, particularly in lower-speed tiers. As a result, operators are increasingly focused on pricing, service bundling, and customer experience, including converged broadband-mobile offerings, rather than peak speeds alone.
On the technology roadmap, CableLabs continues to extend DOCSIS, including exploration of an “operational annex” supporting spectrum up to 3 GHz and downstream rates around 25 Gbit/s, with longer-term targets of 6 GHz and 50 Gbit/s. At the same time, it is expanding work on PON, including coherent PON, reflecting a more access-technology-agnostic posture.
Migration Trajectory:
Some industry veterans align with the FBA’s long-term view. John Chapman has advocated a “fiber-first” strategy, citing projections that access networks may need to support up to 1 Tbit/s by 2040. Rather than abrupt transitions, this approach emphasizes phased migration from HFC to FTTP while leveraging existing infrastructure.
Quotes:
John Chapman, a DOCSIS pioneer and former long-time Cisco Systems engineering exec, suggested last year that the cable industry should adjust its thinking and take a “fiber-first” approach as historical trends indicate that broadband access networks will need to be capable of supporting speeds of 1 Tbit/s by 2040. Rather than doing a quick cutover, he thinks MSO’s should migrate from HFC to FTTP over an extended period. But they should get started now.
“The industry has reached an inflection point between the maturity of DOCSIS and the inevitability of fiber. It’s about coming up with a graceful, pragmatic solution to migrate, to transition from DOCSIS to fiber. And that migration’s going to take 20 years. But we need a strategy that accommodates the two,” he said. “It’s a cultural change.”
Jay Rolls, a former Charter CTO and current CTO of BSP, a company that conducts due diligence on various types of broadband network transactions, also believes that cable operators should be weighing whether FTTP is the right move. His recent analysis suggests that the capital spend on a DOCSIS 4.0 overhaul is comparable to an FTTP rebuild.
“Every network and market is different, but the tipping point is fast arriving where overbuilding fiber makes as much financial sense as upgrading HFC, especially when you consider what comes next,” he said on a Light Reading podcast.
References:
Upgrading MSO Networks to Fiber to the Home (FTTH): A Technical Perspective
https://fiberconnect.fiberbroadband.org/
Fiber Broadband Association Middle Mile WG: how to use “Digital Infrastructure Networks” for coordinated fiber backbone investments
Analysis: AT&T 1Q-2026 results: increased fiber penetration, FWA momentum, D2D deals, and mobile/home internet bundles
Fiber Optic Boost: Corning and Meta in multiyear $6 billion deal to accelerate U.S data center buildout
Fiber Optic Networks & Subsea Cable Systems as the foundation for AI and Cloud services
How will fiber and equipment vendors meet the increased demand for fiber optics in 2026 due to AI data center buildouts?
Automating Fiber Testing in the Last Mile: An Experiment from the Field
AI wireless and fiber optic network technologies; IMT 2030 “native AI” concept
T-Mobile expands FTTH footprint via 50-50 JVs with Oak Hill Capital and Wren House
T-Mobile US is expanding its fiber-to-the-home (FTTH) footprint by investing ~$2.7 billion in two new 50-50 joint ventures (JVs) with Oak Hill Capital ($2 billion for GoNetspeed and Greenlight Networks) and Wren House ($700 million for i3 Broadband). These partnerships aim to pass around 1.8 million homes, largely in the northeastern U.S., accelerating T-Mobile’s fixed broadband expansion alongside their 5G network. Those deals are expected to close in the first half of 2027. T-Mobile, which markets fiber services under the brand name “T-Fiber,” said the deals are part of a plan to serve 18 million to 19 million total broadband customers – including 3 million to 4 million fiber customers – by the end of 2030.
- GoNetspeed offers voice and broadband services to residential and business customers (including multiple-dwelling units, or MDUs) in parts of Alabama, Connecticut, Maine, Massachusetts, Missouri, New York, Pennsylvania and Vermont, with plans to light up networks in cities in New Jersey and Rhode Island. GoNetspeed sells a handful of fiber-fed broadband tiers up to 6 Gbit/s and offers DSL in some areas.
- Greenlight Networks, founded in 2011, supports speeds up to 10 Gbit/s for residential and business customers in New York (Rochester, Buffalo, Binghamton, Capital Region and Hudson Valley), Pennsylvania (Scranton, Wilkes-Barre and Lehigh Valley), and Baltimore, Maryland. It serves about 225,000 homes and nearly 10,000 small businesses.
- i3 Broadband serves parts of Illinois and Missouri with broadband and voice services.
T-Mobile said GoNetspeed and Greenlight are expected to pass a combined 1.3 million households by the end of 2026, with i3 Broadband expected to pass roughly 500,000 households by that time. As it is with T-Mobile’s prior fiber JVs, the service providers involved in this new pair of transactions will operate under wholesale models that enable T-Mobile to offer “simple” plans with no annual service contracts.
- Target: ~1.8 million new homes passed, primarily in the Northeast.
- Partners: Joint ventures with investment firms Oak Hill Capital and Wren House.
- Strategic Goal: Deepen fiber footprint to support a target of 18-19 million broadband customers by 2030, with 3-4 million on fiber.
- Starlink Business Backup: T-Mobile is introducing a Starlink-powered backup option to provide comprehensive, resilient connectivity for business customers, enhancing their “SuperBroadband” offerings.
- Broadband Strategy: This move follows earlier 2025 moves, including the joint venture with EQT to acquire Lumos and the takeover of Metronet, strengthening T-Mobile’s position as a major fiber competitor.
Image Credit: Panther Media GmbH/Alamy Stock Photo
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New Street Research analysts David Barden and Vikash Harlalka (via Light Reading) said GoNetspeed passed about 770,000 locations in June 2025, with 725,000 of them passed with fiber, and the rest passed by copper and hybrid fiber/coax (HFC). They also estimate that Greenlight passed about 330,000 locations and i3 Broadband passed roughly 370,000 with fiber as of June 2025. Combined, the three operators involved in the proposed T-Mobile JVs pass nearly 1.5 million total locations, including 1.4 million fiber locations, according to NSR.
Based on an assumption that each fiber network operator has achieved penetration levels of about 25%, New Street said this implies that the Oak Hill JV has about 275,000 customers while the Wren House JV has about 75,000. At that level, they said that means T-Mobile is paying about $725 million for customers from the Oak Hill JV and $250 million for customers from the Wren House JV. The New Street analysts said today’s announcement shows that T-Mobile continues to have interest in acquiring “pure-play fiber operators.” As such, they also believe that the odds of a reported T-Mobile-Uniti deal have dropped.
The analysts also believe that the new fiber-focused JVs will also lower the odds of a potential combination with a major US cable operators such as Charter Communications. “A larger fiber footprint also makes it more difficult to get a deal approved by regulators,” they explained.
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Even with the two new JV’s, T-Mobile’s fiber footprint will still be dwarfed by those of AT&T and Verizon,
- AT&T is targeting a 60 million fiber-to-the-premises (FTTP) footprint by 2030, leveraging joint ventures to accelerate deployment.
- Verizon, following acquisitions of Frontier and Eaton Fiber, projects 32 million fiber passings by 2026, with plans to reach 40–50 million via further partnerships and inorganic growth. Verizon, which also struck a deal to acquire Eaton Fiber last fall, is on track to end 2026 with more than 32 million fiber passings. CEO Dan Schulman reiterated that Verizon plans to broaden its fiber footprint to 40 million-50 million “over the medium term,” but did not provide a more specific timeframe. “There’s no question that fiber is a key differentiator … against competitors that don’t have it,” Schulman said, noting that the attachment rate of Verizon mobile customers who also get broadband from Verizon is hovering at about 55%.
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References:
https://www.lightreading.com/broadband/t-mobile-s-new-jvs-fixate-on-fiber
https://www.lightreading.com/broadband/verizon-surpasses-6m-fwa-subs-as-priority-shifts-to-fiber
T-Mobile US announces new broadband wireless and fiber targets, 5G-A with agentic AI and live voice call translation
Analysis: AT&T 1Q-2026 results: increased fiber penetration, FWA momentum, D2D deals, and mobile/home internet bundles
Evercore: T-Mobile’s fiber business to boost revenue and achieve 40% penetration rate after 2 years
T-Mobile & EQT Joint Venture (JV) to acquire Lumos and build out T-Mobile Fiber footprint
Highlights of 2025 Broadband Nation Expo: Comcast, T-Mobile keynotes + selected quotes
T-Mobile posts impressive wireless growth stats in 2Q-2024; fiber optic network acquisition binge to complement its FWA business
Fiber Broadband Association Middle Mile WG: how to use “Digital Infrastructure Networks” for coordinated fiber backbone investments
The Fiber Broadband Association (FBA) today released guidance from its Middle Mile Working Group (WG) which outlines how states can strengthen digital infrastructure through coordinated fiber backbone investment. Fiber is the foundation of AI, powering the high-capacity, low-latency, secure connectivity that links data centers, cloud infrastructure, and the communities that depend on them. To meet rising national demand, the U.S. must scale fiber deployment 2.3x by 2029. This goal requires accelerated infrastructure builds and strong coordination among states, utilities, and industry partners.
Digital Infrastructure Networks are strategic fiber optic systems that connect the core internet backbone to last-mile broadband providers. By strengthening these middle-mile connections, states can reduce the cost of broadband deployment, improve network resiliency, and expand connectivity to unserved and underserved communities.
“Middle-mile infrastructure is what allows broadband networks to scale,” said Sachin Gupta, Chair of the Middle Mile Working Group and Vice President of Business and Technology Strategies at Centranet. “When high-capacity fiber backbones are located closer to underserved communities, providers can extend last-mile networks more affordably, reach more locations, operate more efficiently, and better serve communities across the state.”
Among the recommendations:
- Coordinate infrastructure projects across agencies to streamline deployment and reduce unnecessary construction
- Implement “dig once” policies that install conduit or fiber whenever roads or utility corridors are opened for construction
- Leverage state-owned assets, including rights-of-way, existing fiber routes, and utility infrastructure
- Modernize permitting and coordination processes to accelerate broadband builds
FBA will further explore these strategies during two Middle Mile Working Group breakout sessions at Fiber Connect 2026, taking place Tuesday morning. The sessions include:
- Rural Collaboration, Infrastructure Planning, and Sustaining Affordable, High-Performance Middle Mile Broadband
- Unlocking New Middle Mile Opportunities for ISPs and Community Networks
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Technical Topology: The DWDM Advantage:
- Massive Spectral Efficiency: Multiplexing up to 96+ channels onto a single fiber, with each wavelength supporting 100G, 400G, or 800G data rates.
- Scalable Architecture: Capacity can be increased incrementally by lighting new wavelengths without forklift upgrades or additional trenching.
- Resilient Topologies:
- Ring Networks: Often preferred for regional backhaul, utilizing Optical Add/Drop Multiplexers (OADMs) to provide self-healing 1+1 protection and sub-50ms failover.
- Mesh Networks: The gold standard for reliability, offering multiple diverse paths to ensure uptime even during multiple fiber cuts.
- Long-Haul Performance: Utilizing Erbium-Doped Fiber Amplifiers (EDFAs) and Raman amplification to maintain signal integrity over spans exceeding 1,000 km without electronic regeneration.
References:
Learn more; fiberconnect.fiberbroadband.org. Learn more about FBA’s research here or subscribe to FBA’s Fiber Forward Weekly newsletter here to stay updated.
Digital Infrastructure Networks: Meeting the Broadband Challenge for State Governments
Australia’s NBN and Nokia demonstrate multi-generation optical technologies concurrently over existing FTTP infrastructure
Automating Fiber Testing in the Last Mile: An Experiment from the Field
U.S. fiber rollouts now pass ~52% of homes and businesses but are still far behind HFC
Highlights of FiberConnect 2024: PON-related products dominate
Fiber Broadband Association: 1.4M Fiber Miles Needed for 5G in Top 25 U.S. Metros
AT&T expands its fiber-optic network amid slowdown in mobile subscriber growth
Lumen launches Multi-Cloud Gateway (MCGW) and expands metro fiber network after selling consumer FTTH business to AT&T
Lumen Technologies has announced a new Multi-Cloud Gateway (MCGW) and expanded its metro fiber optic network across 16 major U.S. markets, delivering up to 400G b/sec connectivity to support high-speed AI data processing. This initiative provides a software-defined, self-service platform for secure, private, and flexible connections between enterprise data centers and cloud providers.
Lumen says the new MCGW product and expanded fiber footprint will simplify how data moves across hybrid environments by bringing both centralized multi-cloud routing and high-capacity private metro connectivity. The result will be a more consistent, controllable networking foundation for AI and other modern workloads. This expansion is part of a broader strategy where Lumen plans to reach 58 million fiber miles by 2031 to meet the soaring demand for AI-ready infrastructure.
“Moving data across hybrid environments is a lot like managing air traffic – you need clear routes, predictable timing, and the ability to adjust when conditions change. Most legacy networks weren’t built for that level of coordination,” said Jim Fowler, Lumen chief technology and product officer. “With our expanded network fabric, Lumen gives enterprises a way to move data securely, effortlessly, and consistently across clouds, data centers, and edge locations, designed to reduce the complexity that hold AI-driven operations back.”
Multi-Cloud Gateway: Multi-Cloud Gateway (MCGW) is a core element of Lumen’s shift to cloud-based telecom. Built as a software-defined, self-service routing layer on Lumen’s global fiber network, MCGW provides private, high-capacity connectivity among enterprises, hyperscalers and emerging cloud platforms. It turns traditional telecom interconnection into a programmable cloud fabric, allowing customers to dynamically connect cloud-to-cloud and cloud-to-enterprise environments, optimize traffic for performance and cost, and support advanced use cases such as AI workload distribution and real-time data exchange. By unifying connectivity, routing and policy, MCGW is designed to reduce operational complexity, speed time to service and lower total cost of ownership.
Lumen Multi-Cloud Gateway:
Image credit: Lumen Technologies
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Metro Ethernet & IP Services: Expanded high-capacity, dedicated connectivity across 16 U.S. markets, delivering up to 100Gbps between regional data centers, campuses, and edge locations and up to 400Gbps at key cloud data centers in those markets. This enables fast, secure movement of massive datasets for AI training, analytics, replication, and disaster recovery.
Recently upgraded markets include Northern Virginia; Atlanta; Chicago; Columbus; Dallas; Denver; Kansas City; Las Vegas; Los Angeles; Minneapolis; New York City; Phoenix; Portland; San Antonio; San Jose; and Seattle.
“AI is reshaping network design, pushing enterprises to move from experimentation to execution with architectures that reduce latency, cost variability, and operational complexity,” said Courtney Munroe, Vice President, Worldwide Telecommunications Research at IDC. “As workloads become more distributed and performance sensitive, organizations are rethinking how they connect edge sites, data centers, and multiple clouds, and Lumen’s network fabric shows how programmable networks can deliver more consistent data movement.”
The business impact is immediate and practical for industries scaling their AI ambitions:Financial Services: Keep risk, payments, and fraud workloads synchronized across multiple clouds with centralized policy control for lower latency and more predictable performance.
- Retail: Improve business agility by accelerating data movement across cloud and enterprise environments, so analytics keep pace with changing demand.
- Healthcare: Maintain data separation, support telehealth services, imaging and analytics, disaster recovery, and manage research workloads across institutions and resource centers.
- Manufacturing: Connect regional facilities and cloud environments to enable real-time analytics and predictive maintenance.
- Multi-Cloud Gateway (MCGW): Launched and available as of February 17, 2026, as a software-defined, self-service routing layer.
- Metro Network Expansion: Currently live across 16 major U.S. markets (including New York, Chicago, and Los Angeles), offering up to 400 Gbps at key cloud data centers.
- Internet On-Demand: Expanded in late 2025 to over 10 million new business locations, providing “cloud-like” connectivity scalability within minutes.
- Wavelength RapidRoutes: Available for deployment in just 20 business days, significantly faster than industry standard turn-up times.
- Microsoft: Chosen to expand Microsoft’s network capacity to support surging demand for Azure AI services. Microsoft utilizes Lumen’s Private Connectivity Fabric (PCF) for custom network architecture between data centers.
- Google Cloud: Partnered to modernize Network-as-a-Service (NaaS) offerings. This allows Lumen-managed SD-WAN and security services to be hosted directly in Google Cloud regions.
- Palantir Technologies: A multi-year alliance formed in October 2025 to combine Lumen’s connectivity fabric with Palantir’s Foundry and AI Platform (AIP), enabling enterprises to deploy AI faster in multi-cloud environments.
- Other Hyperscalers: Lumen has secured approximately $8.5 billion in private connectivity deals with companies including Amazon Web Services (AWS) and Meta to support their AI model training.
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On February 2nd, Lumen announced that it completed the sale of its Mass Markets fiber-to-the-home business in 11 states, including Quantum Fiber, to AT&T for $5.75 billion in cash. The sale includes substantially all of the related consumer fiber access network and customer relationships in those 11 states, which serve more than 1 million fiber customers and reaches more than 4 million enabled fiber locations. The completed transaction is another strategic milestone in Lumen’s transformation into the leading enterprise digital networking services company built for the multi-cloud, AI-driven economy rather than for consumer fiber access.
As part of the completed transaction, Lumen will retain assets that will continue to serve as the foundation of its enterprise transformation, including all national, regional, state, and metro level fiber backbone network infrastructure, central offices and associated real estate. In addition, Lumen is retaining and caring for its copper-based consumer services, which continue to provide a strong ongoing financial contribution to Lumen. The enterprise and wholesale fiber customers will remain with Lumen in all geographies.
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About Lumen Technologies:
Lumen is unleashing the world’s digital potential. We ignite business growth by connecting people, data, and applications – quickly, securely, and effortlessly. As the trusted network for AI, Lumen uses the scale of our network to help companies realize AI’s full potential. From metro connectivity to long-haul data transport to our edge cloud, security, managed service, and digital platform capabilities, we meet our customers’ needs today and as they build for tomorrow.
When networks shift from constraint to enabler, organizations can move faster, scale with confidence, and unlock greater innovation. To learn more about these products and availability timelines, visit Multi-Cloud Gateway and Connectivity Services.
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References:
https://assets.lumen.com/is/content/Lumen/lumen-multi-cloud-gateway-data-sheet
Lumen: “We’re Building the Backbone for the AI Economy” – NaaS platform to be available to more customers
Lumen deploys 400G on a routed optical network to meet AI & cloud bandwidth demands
Lumen and Ciena Transmit 1.2 Tbps Wavelength Service Across 3,050 Kilometers
Analysts weigh in: AT&T in talks to buy Lumen’s consumer fiber unit – Bloomberg
Lumen Technologies to connect Prometheus Hyperscale’s energy efficient AI data centers
Microsoft choses Lumen’s fiber based Private Connectivity Fabric℠ to expand Microsoft Cloud network capacity in the AI era
Lumen, Google and Microsoft create ExaSwitch™ – a new on-demand, optical networking ecosystem
ACSI report: AT&T, Lumen and Google Fiber top ranked in fiber network customer satisfaction
Fiber Optic Boost: Corning and Meta in multiyear $6 billion deal to accelerate U.S data center buildout
Corning Incorporated and Meta Platforms, Inc. (previously known as Facebook) have entered a multiyear agreement valued at up to $6 billion. This strategic collaboration aims to accelerate the deployment of cutting-edge data center infrastructure within the U.S. to bolster Meta’s advanced applications, technologies, and ambitious artificial intelligence initiatives. The agreement specifies that Corning will furnish Meta with its latest advancements in optical fiber, cable, and comprehensive connectivity solutions. As part of this commitment, Corning plans to significantly scale its manufacturing capabilities across its North Carolina facilities.
A key element of this expansion is a substantial capacity increase at its fiber optic cable manufacturing plant in Hickory NC, for which Meta will serve as the foundational anchor customer. The construction and operation of these data centers — critical infrastructure that supports our technologies and moves us toward personalized superintelligence — necessitate robust server and hardware systems designed to facilitate information transfer and connectivity with minimal latency. Fiber optic cabling is a cornerstone component for enabling this high-speed, near real-time connectivity, powering applications from sophisticated wearable technology like the Ray-Ban Meta AI glasses to the global connectivity services utilized by billions of individuals and enterprises.
“This long-term partnership with Meta reflects Corning’s commitment to develop, innovate, and manufacture the critical technologies that power next-generation data centers here in the U.S.,” said Wendell P. Weeks, Chairman and Chief Executive Officer, Corning Incorporated. “The investment will expand our manufacturing footprint in North Carolina, support an increase in Corning’s employment levels in the state by 15 to 20 percent, and help sustain a highly skilled workforce of more than 5,000 — including the scientists, engineers, and production teams at two of the world’s largest optical fiber and cable manufacturing facilities. Together with Meta, we’re strengthening domestic supply chains and helping ensure that advanced data centers are built using U.S. innovation and advanced manufacturing.”
Meta is expanding its commitment to build industry-leading data centers in the U.S. and to source advanced technology made domestically. Here are two quotes from them:
- “Building the most advanced data centers in the U.S. requires world-class partners and American manufacturing,” said Joel Kaplan, Chief Global Affairs Officer at Meta. “We’re proud to partner with Corning – a company with deep expertise in optical connectivity and commitment to domestic manufacturing – for the high-performance fiber optic cables our AI infrastructure needs. This collaboration will help create good-paying, skilled U.S. jobs, strengthen local economies, and help secure the U.S. lead in the global AI race.”
- “As digital tools and generative AI continue to transform our economy — in fields like healthcare, finance, agriculture, and more — the demand for fiber connectivity will continue to grow. By supporting American companies like Corning and building and operating data centers in America, we’re helping ensure that our nation maintains its competitive edge in the digital economy and the global race for AI leadership.”
Key elements of the agreement:
- Multiyear, up to $6 billion commitment.
- Corning to supply latest generation optical fiber, cable and connectivity products designed to meet the density and scale demands of advanced AI data centers.
- New optical cable manufacturing facility in Hickory, North Carolina, in addition to expanded production capacity across Corning’s North Carolina operations.
- Agreement supports Corning’s projected employment growth in North Carolina by 15 to 20 percent, sustaining a skilled workforce of more than 5,000 employees in the state, including thousands of jobs tied to two of the world’s largest optical fiber and cable manufacturing facilities.
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Comment and Analysis:
Corning’s “up to $6 billion” Meta agreement is essentially a long‑term, anchor‑tenant bet that AI‑era data centers will be fundamentally more fiber‑intensive than legacy cloud resident data centers, with Corning positioning itself as the default U.S. optical plant for Meta’s buildout through ~2030. In practice, this deal is a long‑term take‑or‑pay style capacity lock that de‑risks Corning’s capex while giving Meta priority access to scarce, high‑performance data‑center‑grade fiber and cabling.
AI data centers are becoming the new FTTH in the sense that hyperscale AI buildouts are now the primary structural driver of incremental fiber demand, design innovation, and capex prioritization—but with far higher fiber intensity per site and far tighter performance constraints than residential access ever imposed.
Why “AI Data Centers are the new FTTH” for fiber optic vendors:
For fiber‑optic vendors, AI data centers now play the role that FTTH did in the 2005–2015 cycle: the anchor use case that justifies new glass, cable, and connectivity capacity.
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AI‑optimized data centers need 2–4× more fiber cabling than traditional hyperscalers, and in some designs more than 10×, driven by massively parallel GPU fabrics and east–west traffic.
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U.S. hyperscale capacity is expected to triple by 2029, forcing roughly a 2× increase in fiber route miles and a 2.3× increase in total fiber miles, a demand shock comparable to or larger than the early FTTH boom but concentrated in fewer, much larger customers.
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This is already reshaping product roadmaps toward ultra‑high‑fiber‑count (UHFC) cable, bend‑insensitive fiber, and very‑small‑form‑factor connectors to handle hundreds to thousands of fibers per rack and per duct.
In other words, where FTTH once dictated volume and economies of scale, AI data centers now dictate density, performance, and margin mix.
Carrier‑infrastructure: from access to fabric:
From a carrier perspective, the “new FTTH” analogy is about what drives long‑haul and metro planning: instead of last‑mile penetration, it’s AI fabric connectivity and east–west inter‑DC routes.
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Each new hyperscale/AI data center is modeled to require on the order of 135 new fiber route miles just to reach three core network interconnection points, plus additional miles for new long‑haul routes and capacity upgrades.
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An FBA‑commissioned study projects U.S. data centers alone will need on the order of 214 million additional fiber miles by 2029, nearly doubling the installed base from ~160M to ~373M fiber miles; that is the new “build everywhere” narrative operators once used for FTTH.
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Carriers now plan backbone routes, ILAs, and regional rings around dense clusters of AI campuses, treating them as primary traffic gravity wells rather than as just a handful of peering sites at the edge of a consumer broadband network.
The strategic shift: FTTH made the access network fiber‑rich; AI makes the entire cloud and transport fabric fiber‑hungry.
Strategic implications:
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AI is now the dominant incremental fiber use case: residential fiber adds subscribers; AI adds orders of magnitude more fibers per site and per route.
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Network economics are moving from passing more homes to feeding more GPUs: route miles, fiber counts, and connector density are being dimensioned to training clusters and inference fabrics, not household penetration curves.
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Policy and investment narratives should treat AI inter‑DC and campus fiber as “national infrastructure” on par with last‑mile FTTH, given the scale of projected doubling in route miles and more than doubling in fiber miles by 2029.
In summary, the next decade of fiber innovation and capex will be written less in curb‑side PON and more in ultra‑dense, AI‑centric data centers with internal fiber optical fabrics and interconnects.
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References:
Meta Announces Up to $6 Billion Agreement With Corning to Support US Manufacturing
Big tech spending on AI data centers and infrastructure vs the fiber optic buildout during the dot-com boom (& bust)
Analysis: Cisco, HPE/Juniper, and Nvidia network equipment for AI data centers
Networking chips and modules for AI data centers: Infiniband, Ultra Ethernet, Optical Connections
Will billions of dollars big tech is spending on Gen AI data centers produce a decent ROI?
Superclusters of Nvidia GPU/AI chips combined with end-to-end network platforms to create next generation data centers
Lumen Technologies to connect Prometheus Hyperscale’s energy efficient AI data centers
Proposed solutions to high energy consumption of Generative AI LLMs: optimized hardware, new algorithms, green data centers
Hyper Scale Mega Data Centers: Time is NOW for Fiber Optics to the Compute Server
Fiber Optic Networks & Subsea Cable Systems as the foundation for AI and Cloud services
Introduction:
A foundational enabler of global AI infrastructure and cloud service expansion are the fiber-optic networks interconnecting data centers worldwide. These high-capacity optical systems form the invisible backbone of modern digital society, facilitating everything from real-time financial transactions and mission-critical enterprise traffic to defense systems, entertainment, and personal communications. Access to cloud-based AI platforms—and the data-driven intelligence they deliver—depends on efficient, low-latency connectivity to data centers. As AI workloads proliferate across industries and continents, the unifying role of optical fiber becomes paramount, ensuring equitable global access to advanced digital capabilities.
A core prerequisite for scaling AI and cloud services is the mesh of high-capacity fiber-optic networks that interconnect data centers globally. These networks silently underpin digital society, carrying the data that powers financial markets, mission-critical enterprise applications, national security, entertainment platforms, and everyday human communication.
Cloud-based AI services only become meaningful when users, enterprises, and machines can reach them with low latency, high reliability, and predictable performance. In this context, the unifying role of fiber is increasingly strategic, as it determines who can participate in the AI economy and at what scale.
Subsea (fiber) cable systems as digital unifier:
The massive capacity and spectral efficiency of optical fiber have driven its deployment from access networks to backbone routes and across the world’s oceans. Today, more than 570 subsea cables carry over 99% of international traffic, effectively stitching together a single global fabric for AI and cloud connectivity.
New subsea systems highlight how infrastructure investments are closing regional gaps rather than just adding raw terabits: the Medusa submarine cable system will help narrow the digital divide between Europe and North Africa, the Bangladesh Private Cable System (BPCS) will establish the country’s first private subsea on-ramps to global cloud and AI ecosystems, and a new Jakarta–Singapore route by PT Solusi Sinergi Digital Tbk (Surge) is set to increase data center interconnectivity while expanding affordable broadband to tens of millions of Indonesians.
As multiple new subsea cable system build outs enter planning and deployment, global bandwidth growth is expected to remain strong, extending the reach of AI and cloud platforms to more geographies, users, and industries.
From PoPs to data centers:
The traffic matrix of the AI era looks very different from that of legacy telecom networks. Instead of primarily connecting PoPs, carrier hotels, and central offices, modern optical networks are being engineered around dense, high-capacity flows between data centers.
More than 11,000 data centers, including over one thousand hyperscale facilities, now form the core nodes of the global digital infrastructure, generating on the order of thousands of petabytes of WAN traffic daily. Subsea bandwidth demand is expected to grow at roughly 30% per year as AI and cloud services scale, placing new design pressure on how subsea and terrestrial backhaul networks are engineered end-to-end.
Unifying subsea and terrestrial backhaul:
This shift is driving a deliberate architectural pivot: instead of treating subsea and terrestrial backhaul as separate domains, leading operators and cloud providers are moving toward unified, end-to-end design philosophies. Traffic no longer “terminates” at a cable landing station or central office; it flows optically and logically from data center to data center across continents.
By optimizing subsea and terrestrial segments as a single system, operators can simplify their networks, reduce CapEx and OpEx, and unlock higher effective capacity. Approaches such as optical pass-through at cable landing sites reduce cost, footprint, and power, while spectrum expansion into C+L bands can deliver a twofold or greater increase in per-fiber capacity, significantly lowering the cost of backhauling subsea traffic to inland data centers.
An ever-increasing number of data centers powering AI services is driving significant bandwidth growth over subsea fiber optic cables. Image Credit: Nokia
Unified optical platforms for the AI supercycle:
Realizing this vision at scale requires platforms that unify roles traditionally split across multiple, specialized systems. For Nokia’s customers, this means leveraging the 1830 Global Express (GX) compact modular portfolio as a single, DCI-optimized solution for transponders, open optical line systems (OLS), and submarine line terminal equipment (SLTE) across both subsea and terrestrial applications.
High-performance coherent transponders on the 1830 GX support 800 Gigabit Ethernet across trans-oceanic distances, using techniques such as Probabilistic Constellation Shaping, Nyquist filtering, and continuous baud rate tuning to push performance toward the Shannon limit. The integrated OLS delivers the full suite of SLTE capabilities, including ROADM-based wavelength switching and spectrum management, ASE or CW idler insertion, and optical channel monitoring, while C+L operation on terrestrial backhaul provides step-function increases in capacity per fiber and reduces the cost of leased backhaul infrastructure.
Photo Credit: Nokia
Operational simplicity and resilience:
Beyond raw capacity, unified platforms enable operators to rationalize operations. Using a common hardware and software stack across subsea and terrestrial domains simplifies planning, training, sparing, deployment, and lifecycle management.
Capabilities such as constant-power ILAs for stable end-to-end DC-to-DC transport, integrated OTDR for proactive fiber monitoring and fault localization, and a rich set of optical protection schemes for service protection and restoration help operators build networks that are not only faster and denser, but also more resilient and easier to run.
What’s next: pluggables and sensing:
The industry is now entering a phase where innovation in optics is tightly coupled to AI and automation. At PTC 2026 in Honolulu, discussions will highlight how pluggable coherent optics and fiber sensing are being introduced into subsea environments to further collapse layers and enhance awareness.
ICE-X 800G coherent pluggables are already enabling 400G, 600G, and 800G per wavelength over regional subsea spans exceeding 4,000 km, and future advances in chromatic dispersion tolerance are expected to extend the thin transponder layer paradigm to trans-Atlantic routes. In parallel, operators are exploring fiber sensing, powered by machine learning and advanced coherent techniques, to transform existing fiber assets into distributed sensors capable of supporting security, integrity monitoring, and new data-driven services.
Connectivity for all:
“Advancing connectivity for the AI supercycle” is more than a tagline; it captures two simultaneous imperatives: scaling networks for performance, efficiency, and sustainability while extending those networks to every region and community. As described herein, fiber optics connectivity is becoming the strategic control point for value creation in the age of large-scale AI.
Nokia’s Role in Subsea Fiber Optic Networks:
Nokia has invested for more than 15 years in helping subsea operators and their customers design, deploy, and operate end-to-end SLTE and terrestrial optical networks, backed by global services and multi-country program support. Following its unification with Infinera, Nokia has emerged as the number-two global vendor of subsea optical transport equipment, earning the confidence of a large majority of operators involved in the latest wave of Asia-Pacific subsea builds. These partnerships position Nokia to help the industry scale and unify networks for the AI supercycle—and to ensure that the benefits of AI-era connectivity reach as many people, countries, and enterprises as possible.
Nokia’s 1830 Global Express (GX) supports high-performance coherent transponders for transmission of high-speed data connections such as 800 Gigabit Ethernet (800GE) across trans-oceanic distances, leveraging features such as Probabilistic Constellation Shaping (PCS), Nyquist filtering and continuous baud rate adjustment to maximize optical reach and fiber capacity up to the Shannon Limit. The 1830 GX OLS supports all needed SLTE functions including ROADM-based wavelength switching and spectrum management, insertion of ASE spectrum or continuous-wave (CW) idler channels, and optical channel monitor.
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References:
https://www.nokia.com/blog/the-unifying-role-of-subsea-fiber-networks/
https://www.nokia.com/optical-networks/1830-global-express/
Subsea cable systems: the new high-capacity, high-resilience backbone of the AI-driven global network
FCC updates subsea cable regulations; repeals 98 “outdated” broadcast rules and regulations
Automating Fiber Testing in the Last Mile: An Experiment from the Field
Automating Fiber Testing in the Last Mile: An Experiment from the Field
By Said Yakhyoev with Sridhar Talari & Ajay Thakur
The December 23, 2025 IEEE ComSoc Tech Blog post on AI-driven data center buildouts [1.] highlights the urgent need to scale optical fiber and related equipment[1]. While much of the industry focus is on manufacturing capacity and high-density components inside data centers, a different bottleneck is emerging downstream— a sprawling last-mile network that demands testing, activation, and long-term maintenance. The AI-driven fiber demand coincided with the historic federal broadband programs to bring fiber to the premises for millions of customers[2]. This not only adds near-term pressure on fiber supply chains, but also creates a longer-term operational challenge: efficiently servicing hundreds of thousands of new fiber endpoints in the field.
As standard-setting bodies and vendors are introducing optimized products and automation inside data centers, similar future-proofing is needed in the last-mile outside plant. This post presents an example of such innovation from a field perspective, based on hands-on experimentation with a robotic tool designed to automate fiber testing inside existing Fiber Distribution Hubs (FDHs).
While central office copper terminating DSLAMs—and Optical Line Terminals (OLTs) in Passive Optical Networks (PONs)—aggregate subscribers and automate testing and provisioning, FDHs function as passive patch panels[3] that deliberately omit electronics to reduce cost. Between an OLT and the subscriber, the passive distribution network remains fixed. As a result, accessing individual ports at a local FDH—and anything downstream of it—remains a manual process. In active networks, DSLAMs and OLTs can electronically manage thousands of subscribers efficiently, but during construction this manual access is a bottleneck. There are likely tens of thousands of FDHs deployed nationwide.
Consider this problem from a technician’s perspective: suburban and urban Fiber to the Home (FTTH) networks are often deployed using a hub-and-spoke architecture centered around FDHs. These cabinets carry between 144 and 432 ports serving customers in a neighborhood, and each line must be tested bidirectionally[4]. In practice, this typically requires two technicians: one stationed at the FDH to move the test equipment between ports, and another at the customer location or terminal.
Testing becomes difficult during inclement weather. Counterintuitively, the technician stationed at the hub—often standing still for long periods—is more exposed than technicians moving between poles in vehicles. In addition to discomfort, there is a real economic penalty: either a skilled technician is tied up performing repetitive port switching, or an additional helper must be assigned. Above all, dependence on both favorable weather and helper availability makes testing schedules unpredictable and slows network completion.
To mitigate this bottleneck, we developed and tested Machine2 (M2)—a compact, gantry-style robotic tool that remotely connects an optical test probe inside an FDH, allowing a single technician to perform bidirectional testing independently.
M2 was designed to retrofit into a commonly deployed 288-port Clearfield FDH used in rural and small-town networks. The available space in front of the patch panel—approximately 9.5 × 28 × 4 inches—constrained the design to a flat Cartesian mechanism capable of navigating between ports and inserting a standard SC connector. Despite the simple design, integrating M2 into an unmodified FDH in the field proved more challenging than expected. Several real-world constraints shaped the redesign.
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| FDH cabinet. Space to fit an automated switch | M2 installed for dry-run testing |
Space and geometry constraints: The patch panel occupies roughly 80% of the available volume, leaving only a narrow strip for motors, electronics, and cable routing. This forced compromises in pulley placement, leadscrew length, and motor orientation, limiting motion and requiring multiple iterations. The same constraints also limited battery size, making energy efficiency a primary design concern.
Port aiming: The patch panel is composed of cassettes with loosely constrained SC connectors. Small variations in connector position led to unreliable insertions. After repeated attempts, small misalignments accumulated, rendering the system ineffective without corrective feedback.
Communications reliability: A specialized cellular modem intended for IoT applications performed poorly for command-and-control. Message latency ranged from 1.5 seconds to over 12 seconds – and in some cases minutes – making real-time control impractical. In rural areas of Connecticut and Vermont, cellular coverage was also inconsistent or absent. Thus, the effort was abandoned between 2022 and 2024.
When the project resumed, an unexpected solution emerged. A low-cost consumer mobile hotspot proved more reliable than the specialized modem when cellular signal was available, providing predictable latency and stable Wi-Fi connectivity inside the FDH—even with the all-metal cabinet door closed and locked.
To further reduce latency, we explored using the fiber under test itself as a communication channel, a kind of temporary orderwire. When a two-piece Optical Loss Test Set (OLTS) is connected across an intact fiber, the devices indicate link readiness via an LED. By tapping this status signal, M2 can infer when a technician at the far end disconnects the meter and automatically connects to the next port. While this cue-based mode is limited, it enables near-zero-latency coordination and rapid testing of multiple ports without spoken or typed commands, which proved effective for common field workflows.
A second breakthrough came from addressing port aiming with vision. Standard computer-vision techniques such as edge detection were sufficient to micro-adjust the probe position at individual ports. To detect and avoid dust caps, M2 also uses a lightweight edge-ML[5] model trained to recognize caps under varying illumination. Using only 30 positive and 30 negative training images, the model correctly detected caps in over 80% of cases.
In our experience, lightweight vision models proved sufficient for practical field tasks, suggesting that accessibility—not sophistication—may drive adoption of automation in outside-plant environments.
| M2’s simplified vision sequence to account for nonuniformity of connectors | ||
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| Camera view: clipped to region of interest. Rough position | Processed view adjust -12px left, -16px up | Processed view after micro-adjusting |
What building M2 revealed:
- Overcoming communications issues led to an intriguing idea: optical background communication, where modulated laser light subtly changes ambient illumination inside the FDH that a camera can detect and extract instructions.
- M2 also proved useful beyond testing. For example, in a verify-as-you-splice workflow, M2 can lase a specific fiber as confirmation before splicing. Interactive port illumination and detection allow a single technician to troubleshoot complex situations.
The comparison below is illustrative and reflects observed workflows rather than controlled benchmarking.
Illustrative comparison of testing workflows in our experience
| Human helper (remote) | M2 | |
| Connect next port | 1–1.5 s | 2.5–4 s |
| Connect random / distant port | 8–24 s | ~11–30 s |
| Ease of deployment | Requires flat ground, fair weather, ground-level FDH | ~15 min setup; requires software familiarity |
| Functionality | Highly adaptable | Limited to 2–3 functions |
| Economics | Inefficient for small networks | Well-suited for small and medium networks |
| Independence factor | Low; requires two people | High; largely weather-independent |
| Best use | Variable builds, high adaptability | Repetitive builds, independent workflows |
Early insights for OSP vendors and standards
Building M2 revealed two broader lessons relevant to operators and vendors. First, there are now practical opportunities for automation to enter outside-plant workflows following developments in the power industry and datacenters[6]. Second, infrastructure design choices can facilitate this transition.
More spacious or reconfigurable FDH cabinets would simplify retrofitting active devices. Standardized attachment points on cabinets, terminals and pluggable components would allow mechanized or automated fiber management, reducing the risk of damage in dense installations.
Fiducial marks are among the lowest-cost adaptations. QR marks conveying dimensions and part architecture would help machines determine part orientation and position easily. Although these are common in the industry, it may be time to adopt them more broadly in telecom infrastructure maintenance.
Aerial terminals may benefit the most from machine-friendly design. Standardized port spacing and swing-out or hinged caps would significantly simplify autonomous or remotely assisted connections. Such cooperative interfaces could enable standoff connections without requiring a technician to climb a pole, improving safety and reducing access costs. Retrofitting aerial infrastructure to make it robot-friendly has been recommended[7] by the power industry and is also needed in the broadband utilities.
Conclusion
A growing gap is emerging between rapidly evolving data-center infrastructure and the more traditional telecom networks downstream. As fiber density increases, testing, activation, and maintenance of last-mile networks are likely to become bottlenecks. One way ISPs and vendors can future-proof outside-plant infrastructure is by proactively incorporating automation- and robot-friendly design features. M2 is one practical example that helps inform how such transitions might begin.
Short video clip from our early field trial in Massachusetts:
https://youtube.com/shorts/MiDoQd_S6Kw
References:
[1] IEEE ComSoc Technology blog post, Dec 23 2025, How will fiber and equipment vendors meet the increased demand for fiber optics in 2026 due to AI data center buildouts? ↩
[2] U.S. Dept. of Commerce Office of Inspector General, “NTIA Broadband Programs: Semiannual Status Report,” Washington, DC, USA, Rep. no. OIG-25-031-I, Sept. 24, 2025. ↩
[3] for an overview of an FTTH architecture see: Fiber Optic Association (FOA), FTTH Network Design Considerations and Fiber Optic Association (FOA), FTTH and PON Applications ↩
[4] Corning Optical Communications, “Corning Recommended Fiber Optic Test Guidelines,” Hickory, NC, USA, Application Engineering Note LAN-1561-AEN, Feb. 2020. ↩
[5] Refer to tools available for easy to use edge computing by Edge Impulse. ↩
[6] See state of the art indoor optical switches like ROME from NTT-AT and G5 from Telescent. ↩
[7] Andrew Phillips, “Autonomous overhead transmission line inspection robot (TI) development and demonstration,” IEEE PES General Meeting, 2014. ↩
About the Author:
Said Yakhyoev is a fiber optic technician with LightStep LLC in Colorado and a developer of the experimental Machine2 (M2) platform for automating fiber testing in outside-plant networks.
The author acknowledges the use of AI-assisted tools for language refinement and formatting.
