Verizon is expanding its role in the AI sector by securing a $1 billion agreement with Google to connect data centers via its dark fiber network. The telecom company is also repurposing central offices into small data centers to support AI inference workloads, as part of its new 'AI Connect' initiative. The deal was revealed during Verizon's second-quarter 2026 earnings call, where CEO Dan Schulman highlighted the growing demand for data center connectivity and edge computing capabilities. 'Now it really is about, how do you connect data center to data center to assure that you can optimize to maximize the ever-exploding need for compute?' Schulman said during the call. 'And while that data center connectivity demand is exploding, there’s an equal amount of desire and demand to power inference models and applications that need ultra-low latency, like robotics or remote surgery, autonomous driving, and move that out into the edge, as opposed to these big, massive data centers.'
Verizon is in the early stages of retrofitting its central offices—locations that house Internet and mobile network equipment—into remote data centers. These centers aim to support inference edge computing with minimal data latency for AI-driven services such as autonomous robotaxi fleets or robotics applications, according to Schulman. 'We did a small trial on that and sold out capability in 24 hours,' Schulman said during the earnings call. 'So we’re seeing a large demand for that as well.' The company had already been replacing copper wiring with fiber-optic technology in central offices, even before converting some into AI infrastructure for edge computing. This comes as Verizon continues retiring its legacy copper network in favor of faster and more power-efficient fiber-optic cables for broadband services.
Verizon significantly expanded its fiber network after acquiring Frontier Communications for $20 billion at the start of 2026, increasing its fiber footprint from 15 states to 31 states, including Washington, DC. Selling unused dark fiber capacity to Google and other AI-focused tech companies could help recoup some of those acquisition costs. The telecom company expects its AI Connect deals to 'begin to impact our revenues and margins beginning next year and grow substantially over the next five to 10 years,' Schulman said in response to a question during the earnings call. That would come on top of Verizon’s core mobility and broadband services that saw record second-quarter results this year.
Source: arstechnica
