Zayo says AI is already driving demand for fiber

The demand for fiber is expected to increase in the next few years due to the U.S. government’s aggressive funding of fiber projects to close the digital divide. Now, according to Zayo, artificial intelligence technologies are also causing a big demand for fiber.

Bill Long, Zayo’s chief product officer, said Zayo “continues to invest tons in its 400G backbone,” and the impetus is demand.

Zayo is investing in upgrades across its long-haul and metro footprints in the U.S. because hyperscalers are ramping up their artificial intelligence (AI) technologies. And data centers are also preparing for an onslaught of demand for more compute, which will be needed to handle AI workloads and train new AI models.

All this AI activity will not only require a lot more compute, but it will also require fast, robust broadband feeding those data centers.

Long said Zayo is seeing “the front edge of demand” for AI. He said in the past, a “bulk ask” for long haul fiber would be about 12 fibers. Lately, Zayo is getting asks for 144 fibers. And in the metro, in the past, an order might come in for 24-48 fibers, and now orders are coming for 244 fibers and more.

As context, when a company such as Zayo lays dark fiber, it normally lays three conduits. And each conduit can be packed full with about 864* strands of fiber. Initially, only one conduit is filled with fibers, and then as demand increases, the empty conduits will be filled, as well.

In addition to demand for fiber coming from AI, Long said there are parts of the U.S. economy that are “re-industrializing.” He cited such things as semiconductor fabs and EV battery factories. Even manufacturers making more mundane items are using a lot more machine learning and automation technologies, which require more bandwidth.

In response to all the demand, Zayo is making a concerted effort to upgrade its existing North American long-haul backbone to 400G optical technology.

Zayo says its North American backbone — about 28,000 route miles — should be fully 400G enabled by the end of 2024. On the downside, Long said, “As people require more fiber counts, fiber is going to get scarce.”

Middle mile and last mile

What will this mean for middle-mile and last-mile fiber projects related to the Broadband, Equity, Access and Deployment (BEAD) program?

For its part, Zayo won about $93 million in the NTIA’s recent middle-mile grant program. 

Middle mile infrastructure provides a critical connection between the massive long-haul networks that crisscross the country and the last mile to the home or business.

Long thinks “it’s fortuitous timing” that middle-mile networks are getting funding right now, with BEAD just right around the corner.

He said when Zayo is expanding and upgrading its long-haul networks, the NTIA funding will allow it to do breakouts for middle-mile routes. In turn, those middle-mile breakouts will bring fiber closer to areas where ISPs who receive BEAD funds want to bring fiber to the last mile.

“The NTIA funding helps us to add breakouts for local markets that otherwise would have been unserved,” he said.

Connecting to the last mile

Internet service providers that apply for BEAD funding will want to reach unserved areas and provide broadband for the last mile. But they’ll still need to connect that last mile to the middle mile. And Zayo is making a big push for those ISPs to connect to its middle mile.

“If you just solve for last mile and can’t get back to the internet, it solves nothing,” said Long. “The problem has always existed, it’s just getting better organized. We’re stepping into that void and saying ‘you do the ISP part, we’ll do the middle-mile part.’”

Zayo has even created an in-house group to help ISPs apply for their BEAD funding. It calls this program “BEAD in a Box.”

Long said, “If you’re a local ISP, you can come to Zayo, and we’ll help you apply for your BEAD funding and then also help you get your middle-mile funding.”

*After publication of this story, Zayo updated the number of strands per conduit.