Verizon signs $2bn-plus AWS AI infrastructure deal

Verizon has signed an AI infrastructure deal with Amazon Web Services worth more than $2 billion. The carrier announced the agreement alongside its third-quarter earnings, expanding a hyperscaler strategy that already includes a $1 billion dark fiber deal with Google signed earlier this year.

The AWS agreement, Verizon said, "establishes a commercial framework to scale distributed compute and meet the real-time demands of agentic and generative AI workloads." In plain terms, Verizon sells the connectivity layer — fiber routes and edge compute locations — that AI data centers need to move workloads with low delay.

What does this change for Verizon?

It turns the carrier's fiber footprint into a growth engine. CEO Dan Schulman said demand spans the whole portfolio.

"Customer demand across dark fiber, lit fiber, [and] our Edge compute locations is exceptionally strong," Schulman said during the earnings call. "Obviously it represents a significant growth opportunity for us and a large... rapidly growing TAM for us, addressable market."

The Google deal, signed months earlier, has Verizon supplying dark fiber to connect Google's data centers. With AWS now on the books, Schulman said more contracts are in negotiation.

"We now have an active pipeline of additional hyperscalers, neocloud providers, and large enterprise clients who are in negotiations to have us supply them with either dark or lit fiber connectivity," he said.

He added: "I am also pleased to report that we are seeing momentum with numerous partners to use our network hubs for AI inference Edge computing, and that momentum is already turning into signed deals."

The first long-term contracts should each generate hundreds of millions of dollars over their term, according to Schulman. Verizon has signed roughly $4 billion in contracts so far.

"Based on the demand we are seeing, we expect both our fiber and Edge computing to add meaningfully to our future growth," he said.

A strategy one year in the making

The earnings call marked a full year for Schulman as CEO. He outlined an AI-led "full reboot" at the same earnings event last year, shortly after joining. The hyperscaler push also extends the work of predecessor Hans Vestberg, who said in 2024 that Verizon was best placed to maximize the potential of generative AI edge computing.

Supply constraints are covered. Verizon holds a multi-year agreement with fiber manufacturer Corning, under which Corning will supply more than 80 million miles of high-density optical fiber through 2032. That volume supports the long-haul backbone the hyperscalers require, alongside Verizon's own consumer fiber broadband build.

Q3 numbers: broadband drives growth

The quarter itself showed modest top-line growth. Key figures:

• Operating revenue: $34.3 billion, up 1.5 percent year-on-year
• Mobility and broadband service revenue: up 2.9 percent
• Equipment revenue: down 9 percent year-on-year, offsetting part of that growth
• Postpaid phone net additions: 406,000, an increase of more than 820 percent YoY and the strongest Q3 performance in five years
• Broadband net additions: 314,000, split between 159,000 fixed wireless access and 155,000 fiber

Total broadband connections now stand at 17.4 million.

On the fiber buildout, Verizon expects to reach 32 million locations by year's end. The company says it remains on track for its medium-term target of 40 to 50 million locations.

Schulman signaled a stricter discipline on where Verizon sells fixed wireless access.

"Between fiber and FWA, we have the assets to deliver great value in broadband. It also demands a more sophisticated, segmented approach to FWA. Where we can't deliver the speed a particular segment of customers expects from Verizon, we won't sell it," he said.

Following the results, Verizon raised its full-year guidance for the third consecutive quarter. The carrier now expects 1.1 million to 1.2 million net additions for the year, up from the upper half of its prior 750,000-to-1-million range. It also expects higher cash flow from operations and higher free cash flow.