- Hyperscalers are exerting a growing influence over fiber supply, using long‑term partnerships to secure capacity for AI and data centers
- Operators are now competing with hyperscalers’ scale and spending power
- Geopolitical disruptions, including a helium shortage tied to the Iran war, add new risk to fiber availability
As hyperscalers pour billions into AI infrastructure, they are no longer just major buyers of optical fiber — they are increasingly shaping how and where it gets made. Corning’s move to expand its fiber manufacturing facility in North Carolina, which broke ground this week, is backed by Meta as an anchor customer.
The $6 billion partnership between the two companies, announced in January, raises questions for telecom operators about whether large‑scale, long‑term hyperscaler partnerships are altering allocation and pricing dynamics—and whether telco fiber needs are at risk of being deprioritized as suppliers such as Corning chase hyperscalers' business.
Corning's expansion in North Carolina is designed to support Meta’s fast‑growing AI data center footprint, not traditional telecom networks. Indeed, hyperscalers are no longer just large buyers of fiber; they are increasingly underwriting production itself. Corning, for instance, is also preparing to manufacture hollow‑core fiber for Microsoft, another example of hyperscalers partnering directly with suppliers to accelerate development of next‑generation fiber technologies.
Are telcos at risk of being sidelined?
The big four hyperscalers spent more than $416 billion on footprint expansion in 2025 and that number is expected to blow past $600 billion this year. Meanwhile, Dell'Oro Group just released a forecast noting that global telecom capex is expected to decline 2% in 2026 and grow at a measly 1% CAGR through 2030. The question for the telecom industry is whether a hyperscaler‑led fiber investment wave ultimately helps or sidelines telco demand.
Hyperscalers’ fiber needs differ meaningfully from those of telcos. Data center operators prioritize ultra‑high fiber counts, short‑reach and campus interconnect applications, and increasingly specialized products designed to reduce latency and power consumption inside massive AI clusters. Hollow‑core fiber, for example, is aimed at data center use cases rather than access or long‑haul networks.
By contrast, telcos remain focused on more conventional fiber types optimized for outside plant deployment, access networks and long‑distance transport. Their purchasing decisions are often shaped by regulatory timelines, grant funding cycles and slower capital planning processes.
While telco volumes are significant, they are fragmented across many operators and projects, which can dilute their influence compared to a single hyperscaler placing a massive, centralized order.
"Hyperscalers are focusing on long-term, and vertically integrated supply chain, prioritizing speed and volume over price," said a Senior Strategist (Emerging Tech Content) for Stratview Research, which just released a report on the market.
"With AI data center traffic growing 50%+ annually and requiring up to 30-40x more fiber per rack, manufacturers are allocating capacity toward hyperscaler-driven, performance-grade fiber rather than cost-sensitive telco deployments," he added. "Increasing demand from hyperscale data centers is changing both allocation and pricing dynamics for fiber suppliers, shifting the industry from a period of oversupply to a ‘fiber famine.'"
In response to questions from Fierce, a Corning representative noted the company has formally committed to ensure sufficient American-made fiber products are available to support the Broadband Equity, Access, and Deployment (BEAD) Program. The rep added "We will prioritize BEAD-funded projects by working directly with award recipients to align delivery lead times with deployment schedules. We are also setting aside critical supply for rural operators through our agreement with NTCA -- The Rural Broadband Association."
A 'fiber famine'
To be sure, hyperscaler giants are racing to build new data-center capacity, lock in GPU supply and launch profitable services. And to meet these needs, fiber suppliers are focusing on supplying high-density fiber and connectivity products to improve performance and manage costs.
"I think there is no question that the aggregate demand from the existing hyperscaler and large telco contracts will undoubtedly extend lead times for fiber beyond the already-extended lead times these end customers are already seeing," said Jeff Heynen, VP, Broadband Access and Home Networking, for Dell'Oro Group.
"Normal lead times typically run in the 8-12 week time frame and these have been easily extended to 20+ weeks in high-demand markets," he added. "I think the most exposed group among the telcos are the smaller players who don’t generate the same level of demand as their tier 1 counterparts and are typically the first ones who get shipment delay notices."
On the one hand, additional manufacturing capacity should, in theory, benefit all buyers. Fiber suppliers have been operating under tight constraints, with demand coming from data centers, BEAD‑funded broadband builds and 5G densification efforts colliding.
"Even for those operators about to begin BEAD-related deployments, I think the fiber manufacturers are all doing their best in this perfect storm of demand to keep shipments flowing so that these operators’ timelines don’t get delayed too much," noted Heynen.
Plus, long‑term hyperscaler agreements give vendors like Corning the confidence to invest in new plants and equipment — investments that might otherwise be hard to justify.
On the other hand, hyperscalers bring scale, speed and pricing power that telcos generally cannot match. Meta and Microsoft are willing to sign multiyear, multibillion‑dollar contracts and co‑develop new fiber types tailored to their architectures. That willingness to pay — and to commit early — may influence how suppliers allocate capacity, especially during periods of shortage.
Helium shortage adds to the challenge
A rising tide
It is yet to be seen whether hyperscaler demand will flood out telco orders or become a rising tide that lifts all boats. Analysts seem inclined toward the latter scenario.
Stratview Research noted that global fiber demand is expected to top 800 million fiber-km by 2027, pushing the optical fiber cable market past $13 billion by 2031. "These projections, supported by fiber giants’ production expansions, are likely to ease supply tightness and moderate prices by 2028–2030," the firm wrote.
"The investment in Corning’s new plant will certainly help to ease some of the supply constraints we are currently seeing," Heyned concluded. "That will ultimately benefit all end customers of fiber, not just Meta. Any additional manufacturing capacity that comes online will help both hyperscalers and telcos. The challenge will be satisfying all of that demand before the new facilities are operational."