Active hyperscaler pipeline

Verizon’s agreements with Google and Microsoft are just two of the larger pool of customers it works with to provide its AI Connect service.

The service provider is seeing strong customer demand across dark fiber, lit fiber and edge compute locations.

While he did not specify any other customers, Schulman said it has “an active pipeline of additional hyperscalers, neo cloud providers and large enterprise clients who are in negotiations to have us supply them with either dark or lit fiber connectivity.”

He added that “we are seeing momentum with numerous partners to use our network hubs for AI inference edge computing, which is already turning into signed deals.”

This demand is a good sign that fiber and edge computing will contribute to future growth. Verizon expects revenue growth from its AI Connect service customer wins to become impactful next year.

What’s compelling about Verizon’s recent AI Connect contracts is that they leverage its existing fiber and real estate assets.

“The incremental capital required to deliver against these agreements is modest and success-based and tied to defined contracts,” Schulman said. “And we've locked in the fiber to deliver.”

Looking ahead, Verizon said there’s no change to its 2026 CapEx outlook. Verizon’s capital expenditure was $11.9 billion through the end of the third quarter.

“We are on track to meet our full-year guide of $16 billion to $16.5 billion inclusive of success-based capital related to AI Connect,” Schulman said.

Scaling fiber reach

Verizon's growing fiber network underpins AI Connect.

In September, Verizon reached a multi-billion-dollar supply agreement with Corning for over 80 million miles of high-density optical fiber to meet surging demand, reflecting how fiber is being used to serve multiple network needs at once.

The agreement through 2032 provides the high-capacity optical solutions needed to expand nationwide consumer broadband access while scaling a high-density backbone to support Gen AI compute needs.

As part of this agreement, Verizon will leverage Corning’s Flow Cable, which enables Verizon to deploy significantly more optical fiber within conduit pathways. The flexible ribbon cable maximizes the value of Verizon’s existing infrastructure investments while substantially increasing network capacity and bandwidth.

“Last month, we announced a multi-year, multi-billion-dollar agreement with Corning for more than 80 million miles of fiber through 2032, supporting both our fiber broadband expansion and the long-haul backbone that AI hyperscalers need,” Schulman said. “Taken together, this opportunity significantly extends our addressable market, our revenues and our profits, and we will talk about how it helps to drive our 2027 growth on our next earnings call.”

Verizon Business reported total operating revenues of $7.02, up 2.6% sequentially.

For the second quarter, Verizon’s total operating revenue was $34.3 billion, up 1.5% year over year. Mobility and broadband service revenue grew 2.9%, offset by a 9.0% year-over-year decline in equipment revenue. 

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