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The scale of demand from AI infrastructure dwarfs anything the fiber industry could ever have planned for. Data center fiber demand grew roughly 76% year-on-year in 2025, according to CRU data cited by various industry publications, and the segment is projected to account for 30% of total global fiber demand by 2027. In 2024, that figure was below 5%.
All this is because AI training and inference clusters require far denser interconnect fabrics than conventional cloud infrastructure. Rahul Puri, CEO of STL's Optical Networking Business, told Fierce Network in December that AI-focused data centers need approximately 36 times more fiber than traditional CPU server racks.
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Unfortunately, manufacturing optical fiber preforms, the glass rods from which fiber is drawn, is a technically demanding process with high barriers to entry. New preform capacity typically takes 18 to 24 months to build, according to industry sources cited by DigiTimes , which limits near-term supply regardless of how quickly downstream cable production can scale.
Compounding the bottleneck, manufacturers have shifted production from standard G.652D fiber used in telecom networks to higher-margin G.657A fiber suited to AI data centers and drone applications. That reallocation has created secondary shortages in conventional telecom-grade fiber and contributed to broad price increases. Global fiber prices have risen roughly 70% from a 2021 trough of $3.70 to approximately $6.30 per fiber-kilometer.
AI data centers are swallowing the world's memory and storage supply
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/ai-data-centers-are-consuming-fiber-optic-cable-faster-than-suppliers-can-make-it#main
- https://www.tomshardware.com/subscription
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Informational only. No financial advice. Do your own research.