The rapid evolution of artificial intelligence (AI) technology is reshaping the bandwidth landscape, marking a significant shift in how businesses procure network infrastructure. A recent study by Zayo highlights the accelerating demand for higher-capacity bandwidth, with a particular focus on 400G wavelengths, which are becoming increasingly dominant in investments. This research underscores the critical role AI plays in driving these changes and the implications they have for various industries.
Bandwidth Purchasing Trends: A Comprehensive Overview
In a bid to better understand bandwidth consumption, Zayo surveyed over 1,800 of its North American customers engaged in dark fibre, wavelengths, and network connectivity. This extensive analysis included insights from 16 decision-makers in large enterprises, each with more than 1,500 employees. The results, spanning from 2020 to 2024, illustrate a remarkable 2.8 times growth in overall wavelength capacity purchases. Notably, metro dark fibre acquisitions surged by 268%, while long-haul dark fibre experienced a 52.6% increase year-over-year from 2023 to 2024.
In 2024 alone, 400G wavelengths accounted for the majority of terabits purchased, highlighting a significant shift away from traditional 10G and 100G services. As companies continue to prioritize high-capacity infrastructure, it becomes clear that the appetite for robust bandwidth is not merely a trend but a fundamental shift driven by underlying technological advancements.
The Key Players in High-Capacity Infrastructure
The research revealed that large enterprises, particularly hyperscalers and telecommunications carriers, are leading the charge in high-capacity infrastructure consumption. From 2020 to 2024, these organizations were responsible for a staggering 91.2% of all metro dark fibre purchases and 66.8% of wavelength deals exceeding 1 terabit (Tb) of capacity. Furthermore, a marked increase in the number of customers purchasing over 1Tb of wavelength capacity was noted, with more than double the number of repeat buyers in 2024 compared to 2020.
On average, large-deal buyers moved from making 11 significant purchases in 2020 to 15 by 2024, reflecting an escalating demand for high-capacity solutions. In this context, an impressive 61.91% of all wavelength capacity was acquired by merely ten buyers—exclusively hyperscalers or carriers—showing that a small number of entities are driving much of the market’s growth.
Industry-Specific Drivers Fueling Demand
As industries increasingly rely on high-capacity bandwidth to support digital transformation and technological advancements, various sectors are contributing to this demand. Hyperscalers, technology firms, and carriers highlight the need for larger capacity to fuel innovations within cloud services and data centers, aligning with the surge of businesses adopting next-generation technologies.
Furthermore, the manufacturing sector is experiencing a surge in bandwidth requirements driven by the principles of Industry 4.0. This includes the integration of real-time analytics, IoT applications, and AI-driven processes, all demanding robust infrastructure. Other sectors like finance, media, and hospitality are increasing their bandwidth capabilities in order to address soaring data needs, reflecting the broader trend of technology adoption across industries.
AI, in particular, stands out as a primary catalyst for upheaval in bandwidth requirements. The proliferation of AI applications is spurring unprecedented levels of investment in wavelength and fibre infrastructure, predominantly by hyperscalers and tech companies aiming to leverage AI’s capabilities effectively. As AI deployment becomes more widespread, organizations are adjusting their purchase considerations to prioritize scalability, hybrid cloud optimization, and security for sensitive workloads, while keeping a careful eye on cost and performance.
Emerging Markets: A Surge in Demand
Regions that were previously not prominent in the bandwidth landscape are experiencing explosive growth. The research identified a remarkable surge in demand for network services in emerging datacentre markets such as Memphis and Salt Lake City, with increases in long-haul routes and metro wavelength connectivity reaching 4,300% and 348.28% year-over-year from 2023 to 2024, respectively. According to Zayo, the relatively affordable space and power available in these cities are key factors driving this surge in investment.
The Future of Bandwidth in the Era of AI
As the age of AI continues to unfold, the demand for capacity and connectivity is set to rise even further. Zayo emphasizes that the growth in data demands, spurred by increased AI adoption, indicates a future where bandwidth requirements will only escalate. The implications of these shifts are profound, not only for major players in the tech and telecom sectors but also for businesses across various industries that rely on advanced technologies to remain competitive.
In conclusion, the findings from Zayo’s research illustrate a fundamental transformation in the bandwidth landscape, driven by the urgent needs of AI and digital innovation. Understanding these trends will be essential for both investors and businesses looking to navigate the ever-evolving technological landscape effectively.