- Zayo recently secured an anchor tenant in “a monster deal”
- The company is currently building 8,000 more route miles of long-haul network
- These builds represent the largest single network investment in new build and overbuild miles in Zayo’s history
Zayo has won a new deal with an AI infrastructure company to build long-haul networks, and a company executive said AI is driving a ton of new demand for its long-haul fiber.
Bill Long, Zayo’s chief product and strategy officer, said the company can’t yet name the anchor tenant in the new contract, but he called it “a monster deal.” Zayo’s customers already include all the major hyperscalers, neo-cloud operators and big AI labs.
As part of the new deal, Zayo will build 8,000 more route miles, including six new long-haul fiber routes totaling 3,000 route miles and overbuilds of nine high-capacity corridors covering over 5,000 route miles.
AI workloads are concentrating growth in a defined set of high-value corridors where power availability is driving data-center demand, and those data centers need to connect to adjacent metros. Zayo is prioritizing these corridors.
New routes in construction are:
1. Las Vegas to Reno, Nevada
2. Denver to Chicago
3. Dallas to Austin
4. Columbus, Ohio to Indianapolis
5. Atlanta to Ashburn, Virginia
6. Kansas City to Omaha
Overbuilds in progress include:
1. Sacramento to Reno, Nevada
2. Las Vegas to Phoenix
3. Denver to Salt Lake City
4. Denver to Dallas
5. Houston to Austin
6. Dallas to Atlanta
7. Chicago to St. Louis to Memphis to New Orleans
8. Cleveland to New York
9. Columbus to Ashburn, Virginia
Zayo says these builds represent the largest single network investment in new build and overbuild miles in Zayo’s history. The company won’t say exactly how much these builds are costing, only that “it’s in the billions” of dollars.
“This is probably the largest long-haul build, new-route build announced in the past 25 years,” said Long. “No one else has done anything even close to this scale in the past 25 years. “We are the only company in the U.S. that has been building at a national scale, not just over-pulling what we already have.”
Capacity demands are exploding
Long said past long-haul builds were supposed to last for 10 years, but that capacity is getting “soaked up” much faster than anticipated. So now, Zayo is putting much more fiber in the ground, not only for its big, new contract, but for other customers as well.
He said, “Think of it as enough infrastructure to basically do 20,000 strands. It's multiple conduits. And we're not pulling all the conduits immediately, but we're putting multiple conduits in the ground and making sure that it can scale up to thousands and thousands of fibers.
Currently, Zayo’s global network of long-haul, middle-mile, regional and metro fiber comprises about 148,000 route miles, worldwide, with the vast majority of those routes in the U.S.
Zayo is also in the process of closing on Crown Castle’s fiber business, which will add another 90,000 fiber route miles to its network, primarily metro focused.