The demand for bandwidth in data center connectivity has experienced a massive surge of nearly 330% between 2020 and 2024, according to a recent report by Zayo. This significant increase is driven by the expansion of hyperscale data centers and advancements in artificial intelligence (AI) technology.
One of the key findings of Zayo’s Bandwidth Report is the prominent role played by hyperscale data center operators and carriers in the market. In 2024, just 10 major buyers, primarily from these segments, accounted for nearly 62% of all bandwidth purchases. The report is based on purchasing data from over 1,800 Zayo customers and a survey of 16 enterprise decision-makers.
Between 2020 and 2024, hyperscalers were responsible for a significant portion of Zayo’s metro dark fiber installations and large-scale bandwidth deals exceeding one terabit. The total bandwidth purchases more than doubled during this period, reaching 42.4 terabits.
Metro dark fiber, which involves providing ‘unlit’ optical fiber infrastructure in urban areas, has seen a sharp increase in demand. From 2023 to 2024, purchases of metro dark fiber rose by 268%, while long-haul dark fiber purchases grew by 53%.
The report also highlights the impact of AI on driving these networking trends. The demand for bandwidth is primarily fueled by the requirements of AI workloads for both inference and training. Zayo reported over $1 billion in AI-related long-haul network deals in 2024, with an additional $3 billion in the pipeline.
Chaz Kramer, Zayo’s vice president of fiber and transport, emphasized the challenges faced by data center operators in securing locations with sufficient power to support AI workloads. Hyperscalers are increasingly moving towards owning dark fiber to have control over scale, latency, and costs.
The surge in bandwidth demand is reshaping network topologies and increasing the need for high-capacity routes in both traditional and emerging data center markets. As hyperscalers expand their AI deployments, the power requirements and bandwidth demands are redefining where and how data centers are constructed.
The escalating energy demands per rack are driving companies to build data centers outside of traditional metro hubs where electrical infrastructure may be limited. The geographical distribution of data centers is rapidly changing to accommodate the growing demand for connectivity, with cities like Memphis and Salt Lake City experiencing significant growth in long-haul and metro bandwidth connectivity.
In conclusion, the exponential growth in bandwidth purchases for data center connectivity is a direct result of the increasing demand for AI-driven workloads and the need for high-capacity networking infrastructure. The trend towards owning dark fiber and reshaping network topologies underscores the critical importance of connectivity in supporting the evolving needs of modern data centers.
Yu believes that we are only scratching the surface of what AI can achieve, emphasizing that we are still in the early stages of its development.
He predicts that the next few years will be dedicated to expanding AI infrastructure and interconnecting various data centers, which will require significant bandwidth allocation.
In the realm of technology and data management, owning dark fiber can revolutionize the way we approach connectivity and data transmission. As we delve deeper into the potential of AI, the importance of robust infrastructure becomes increasingly evident.
