Verizon Confirms Nearly $4 Billion in Signed Contracts for AI Connect Unit
Key Facts
Verizon said on October 26, 2026, that its AI Connect unit had signed contracts worth nearly $4 billion, linking its expansion in fiber and edge computing to demand for AI infrastructure. The contracts include dark or lit fiber connectivity and edge computing deals, the company said at its third-quarter earnings conference. CEO Dan Schulman said AI infrastructure is becoming a real growth engine for the company. One of the agreements is a deal with AWS worth more than $2 billion, announced the same day. Verizon said the agreement includes building long-haul, high-capacity fiber routes to connect AWS data center sites.
The company distinguishes the value of signed contracts from revenue that will appear later; it said its first long-term contracts are expected to generate hundreds of millions of dollars over their terms. AI Connect revenue is expected to begin affecting results in 2027, according to Verizon’s estimate. Executives described the revenue margins as attractive, without specifying a percentage. The company also said the additional capital required to execute the agreements is limited, spent on a success-based basis and tied to specific contracts. This timing places the expected revenue in coming years, rather than treating the value of signed contracts as income already realized.
Verizon’s activity in this area extends beyond the AWS agreement; it said additional hyperscalers, emerging cloud providers and large enterprise customers are negotiating for dark or lit fiber connectivity. It added that partners are also signing agreements to use its network hubs for edge computing to run AI application inference. The company did not disclose the value of these negotiations or when new agreements might be signed. Verizon said the AWS agreement builds on its agreement with Google, announced in the previous quarter, without disclosing a value for that deal. Its earlier collaboration with AWS also includes developing private mobile edge computing solutions for enterprise customers, according to Verizon Business’s announcement.
Verizon’s third-quarter 2026 total operating revenue was $34.3 billion, up 1.5% year over year. Growth of 2.9% in mobility and broadband services revenue offset a 9.0% decline in equipment revenue, according to the company’s results. Verizon attributed the drop in equipment revenue mainly to fewer device upgrades and its decision to reduce price subsidies. Consolidated adjusted EBITDA margin was 40.2%, up from 37.8% in the year-earlier quarter, and the company said it was the highest it had recorded. The results provide context for AI Connect’s expansion, while revenue from the new contracts remains expected in 2027.
The company raised its 2026 operating and financial outlook after its third-quarter results. It increased its target for postpaid phone net additions to between 1.1 million and 1.2 million, compared with a previous range of 750,000 to 1 million subscribers. It also raised its forecast for mobility and broadband services revenue growth to the upper half of an annual range of 2.5% to 3.0%, with growth of about 4.0% in the fourth quarter. Verizon expects full-year free cash flow growth to approach 12.0% and adjusted earnings per share to be between $5.04 and $5.06. It estimated 2026 capital spending at between $16.0 billion and $16.5 billion, including investments tied to AI Connect’s growth.
As part of its network expansion, Verizon and Corning announced a multiyear, multibillion-dollar supply agreement in September 2026, covering more than 80 million miles of high-density optical fiber and connectivity solutions between 2027 and 2032. The companies said the agreement supports broadband expansion and AI infrastructure. In trading, Verizon shares fell 2.5% in early trading on October 26, according to Reuters. EL7 data showed the stock closed at $45.05 on November 2, and Amazon shares closed at $250.69 on November 3. The expected financial impact of AI Connect contracts begins in 2027, according to the timing Verizon specified.