Verizon signed an AI infrastructure deal worth more than $2 billion with Amazon Web Services on October 26, under which the carrier will provide high-capacity fiber-optic connectivity for AWS data centers to support growing AI computing workloads. According to Reuters, the deal came as Verizon raised its full-year forecasts, now expecting 1.1 million to 1.2 million postpaid phone subscriber additions and adjusted earnings per share of $5.04 to $5.06. Third-quarter revenue of $34.3 billion fell short of analyst estimates, and shares rose 2.4 percent in premarket trading. The agreement follows a more than $1 billion Google dark-fiber deal Verizon announced in July.
What The Deal Covers
Under the deal with Amazon’s cloud unit, Verizon will provide high-capacity fiber-optic connectivity for AWS data centers, Reuters reported. The connections are meant to enable faster, more reliable data transfers to support growing AI computing workloads. Reuters did not report further terms, such as the length of the agreement or which data center sites it covers, and neither company disclosed more detail in the report.
The deal puts a telecom carrier directly into the AI build-out supply chain. Data centers need enormous amounts of connectivity as well as power and chips, and fiber links between sites carry the training and inference traffic that AI services depend on. For AWS, the agreement secures carrier-grade capacity from one of the largest US network operators, and for Verizon it turns existing network assets into AI-era revenue.
Readers can read how Amazon’s AI stack fits together, from its consumer assistant to the cloud platform that AWS sells to businesses.
Stronger Forecasts, Softer Revenue
Verizon raised its annual forecast for wireless subscriber additions on the same day, Reuters reported, betting on demand for its simplified plans. The carrier reported nearly double the analysts’ estimate for monthly-bill paying wireless subscriber gains in the third quarter, at 406,000, against Visible Alpha expectations of 209,439.
Verizon now expects to add between 1.1 million and 1.2 million postpaid phone subscribers this year, compared with earlier projections of 750,000 to 1 million. It also 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, Reuters reported.
Revenue was pressured by lower device upgrade volumes, Reuters reported, as customers held on to their phones longer after Verizon began cutting device subsidies. Shares of the New York-based company rose 2.4 percent in premarket trading on the news.
Verizon’s Second AI Connectivity Deal
The AWS agreement is Verizon’s second major AI connectivity deal this year. In July, Verizon announced a more than $1 billion agreement with Google to connect data centers using dark fiber, Reuters reported. Together, the two deals show how rising AI demand could open a new revenue stream beyond traditional wireless and broadband services for telecom operators.
The deals come a year into chief executive Dan Schulman’s tenure, during which Verizon has pursued a broad overhaul of its business, restructuring operations and simplifying its wireless offerings, Reuters reported. It launched its Simplicity plan in June, introducing transparent pricing and unlimited data, as part of that reset.
Why It Matters
The Verizon deal matters because it shows where AI money is flowing beyond chips and models. Every new data center needs fiber to move data, and carriers that own that fiber can charge for it. As hyperscalers race to add capacity, connectivity deals worth billions are becoming a recurring feature of the build-out, not a one-off.
The pattern matches the wider spending wave, including Meta’s $35 billion stock sale to fund AI expansion, announced the same day. For telecom operators, AI infrastructure offers growth at a time when phone upgrades are slowing and subscribers keep handsets longer. Whether that growth lasts depends on how long the data center boom runs, but for now carriers are finding a second business inside the AI trade.
Background
Verizon is one of the largest US telecom carriers, and AWS is Amazon’s cloud computing division, whose data centers power a large share of the internet’s AI services. As AI workloads have grown through 2026, demand for data center capacity, power and connectivity has surged, pulling carriers, chipmakers and builders into deals that once belonged to a narrower set of suppliers.
Sources: Reuters: Reuters Verizon AWS deal
0 Comments