Ciena expects artificial intelligence to reshape network spending for several years. The company says AI workloads now drive a deep redesign of optical infrastructure. This shift affects long-haul networks, data center links, and internal data center fabrics.
The message came during Ciena’s latest earnings call. Gary Smith, the company’s president and CEO, pointed to strong order flow. He also said Ciena expects more than $10 billion in backlog by fiscal 2026 end.
“We remain in the very early stages of a multiyear, highly durable network investment era. This is springboarding and caused by the large and growing investments in data center infrastructure,” Smith said.
The main force behind this cycle is AI. Training large models needs huge data movement between servers and sites. Later, AI inference will also need fast and reliable connectivity near users. In simple terms, networks must carry more data, more often, and with less delay.
“As a result, AI is currently driving and will continue to drive significant increases in both bandwidth connectivity demand and network traffic growth,” Smith said.
This creates a clear opportunity for optical networking. Fiber-based systems offer high capacity over short and long distances. They also help operators manage space and energy use. These factors matter because AI clusters consume large amounts of power.
“Because of the increasing demands for higher capacity, faster speed, greater density, improved reliability, reduced space, and lower power and cost, optics have become the indispensable element for next generation AI architectures,” Smith said.
Ciena divides the opportunity into three areas. The first is traditional wide-area networking. This includes backbone, edge, metro, regional, subsea, and long-haul routes. These networks must support more traffic while keeping service quality stable.
The second area is what Ciena calls AI WAN. This connects data centers over wider distances. Today, operators use it for distributed AI training. Over time, it should also support inference across many locations.
The third area sits inside the data center. AI systems need faster links between servers, switches, and graphics processors. Short-reach optical links can help reduce power use while increasing capacity.
However, the shift also brings pressure. Operators need more fiber, better automation, and tighter cost control. Equipment must scale quickly without creating new operational bottlenecks. Energy limits may also shape deployment plans.
Still, Ciena sees a major market expansion ahead. The company expects its total addressable market to grow from about $25 billion today to around $50 billion by 2029. It also expects to capture a larger share.
Ciena points to its coherent optical portfolio as a key asset. Smith highlighted WaveLogic 6 Extreme, described as a 1.6-terabit high-performance modem. The company also reported stronger demand for WaveLogic 5 Nano pluggable optics.
For telecom and cloud network teams, the signal is clear. AI is not only changing computing. It is also changing how networks get built, scaled, and financed.
