What Happened
Verizon Communications has secured a contract worth more than $1 billion to supply dark fiber connectivity for Google’s data centers, the company disclosed on its second-quarter 2026 earnings call on July 24.
Chief Executive Dan Schulman said the agreement covers “several dark fiber routes” and is valued at “well in excess of a billion dollars.” The revenue from the deal is expected to begin next year. Schulman added that Verizon anticipates announcing additional deals by the end of 2026 that together are worth “multiple billions of dollars in revenue over the next several years.”
Verizon intends to use its long-haul and metro fiber assets to connect AI data centers, supplied as dark or lit fiber depending on customer requirements. The carrier is also retrofitting thousands of central offices where it is decommissioning copper and converting them into edge data centers to address demand for AI inferencing applications that need low latency.
The AI infrastructure growth plan is part of the AI Connect initiative that Verizon announced in early 2025.
Schulman described the contracts as “long-duration, high-quality contracted revenue streams from some of the most demanding infrastructure customers in the world.” He added: “We believe that this is just the beginning.”
Verizon is using existing fiber and building new fiber routes for the AI infrastructure market. Schulman did not disclose how much the carrier would need to invest in new fiber to serve this market. The carrier has cut back on capital spending for 2026. AI Connect revenues will be incremental to Verizon’s current business plan, Schulman said.
“Our core business is accelerating, and a new revenue growth factor will rise on top of it next year,” Schulman said. “This is a very different revenue growth profile than Verizon has had in a very long time, and it is the foundation of why we believe that we are at the beginning of a multi-year growth story.”
The companies did not disclose which specific data centers are connected, the contract duration, or the technical specifications of the fiber routes.
Second-Quarter Earnings
Verizon reported second-quarter operating revenue of $34.3 billion, down 0.7 percent from the same period last year. Net income was $3.9 billion, down 22.9 percent year-over-year. Adjusted earnings per share were $1.30, beating analyst estimates of $1.27 to $1.28. Adjusted EBITDA reached a record $13.7 billion.
The carrier added 184,000 postpaid phone customers in the quarter, the highest second-quarter consumer gain in five years. Overall postpaid phone gross additions were the best in eight years. For comparison, Verizon lost 9,000 postpaid phone customers in the second quarter of 2025.
Verizon added 348,000 fiber broadband and fixed wireless access connections in the quarter, up 12.3 percent from the same period last year, bringing its total to 17.1 million connections. Fiber connections grew by 155,000 in the quarter, up from 32,000 in the second quarter of 2025. Fixed wireless access additions were 193,000, down 30.6 percent from the 278,000 added a year earlier.
Wireless retail postpaid phone churn was 0.92 percent in the second quarter, down from 0.97 percent in the same period last year.
“Our churn has been steadily rising quarter after quarter, and it is now down year over year and down sequentially for the second consecutive quarter,” Schulman said. “At the same time, we are improving the quality of our gross adds and lowering our costs to acquire and retain our customers.”
Wireless retail postpaid accounts shrank 1.2 percent in the first six months of the year, but net new accounts were positive for the last two months. “It’s been a long time since we have been able to say that we are now growing both accounts and lines,” Schulman said.
The board of directors extended Schulman’s contract through the end of 2028. The turnaround under Schulman’s leadership accelerated in the second quarter, the company said.
Why It Matters
Dark fiber consists of unused optical fiber cables that customers light with their own transmission equipment. Unlike lit fiber services where the carrier manages the electronics, dark fiber agreements give customers full control over bandwidth, latency, and encryption protocols.
For data center operators, dark fiber eliminates contention and reduces jitter compared with standard commercial connectivity. The arrangement is typically favored by companies that need to move large volumes of data between facilities with minimal delay.
The deal signals that telecom carriers with substantial fiber infrastructure are positioning to capture revenue from the expansion of AI data centers across the United States. Global spending on data center construction has risen sharply as technology companies build capacity for AI training and inference workloads.
Verizon’s agreement with Google follows a broader industry pattern in which carriers are repurposing existing fiber assets and building new routes to serve hyperscaler demand. The revenue model differs from consumer wireless in that these contracts typically span multiple years and provide predictable, recurring income.
The carrier’s ability to secure a deal of this size while reducing capital expenditure suggests it is leveraging existing infrastructure rather than building from scratch. Whether that approach can scale to meet anticipated demand from multiple hyperscalers remains to be seen.
What Is Unknown
Several details about the agreement remain undisclosed. Verizon and Google did not specify which data centers are connected by the fiber routes, the length of the contract, the bandwidth capacity, or whether the deal includes options for expansion. Schulman declined to quantify the capital investment required to fulfill the agreement.
The companies also did not disclose whether the deal replaces or supplements any existing connectivity arrangements between the two firms. Verizon did not name other potential customers for similar AI infrastructure deals, beyond saying that additional agreements are expected by year-end.
Sources
This report is based on Verizon’s second-quarter 2026 earnings call held on July 24, 2026, and reporting from Light Reading, Reuters, and AOL.
Next you can read this-
For networking equipment recommendations, see our best Wi-Fi routers guide and reviews section.