Zayo is navigating a heated data center market with unusual caution. Demand for capacity keeps rising, driven by cloud growth and AI workloads. Yet the company wants to expand without chasing every opportunity.
The Boulder-based infrastructure provider recently signed two major supply and capacity agreements. One deal with Nvidia supports more than 8,000 miles of new fiber. Another agreement with Corning secures long-term fiber-optic cable supplies.
CTO Troy Lupe said preparation now matters more than speed alone. Large builds need partners, permits, and predictable supply chains. Without those, broadband and cloud infrastructure projects can lose momentum quickly.
Lupe described the Nvidia talks as part of a larger ecosystem shift. AI factories need vast compute resources and strong network routes. Those routes must carry traffic between data centers, clouds, and users.
Fiber has returned to the center of telecom investment. Lupe captured that shift simply: “Fiber is cool again, you know?” He added, “It’s been a long time since fiber was cool.”
However, rapid expansion brings heavy financial pressure. Dell’Oro Group recorded a 92% rise in global data center capital expenditure in Q2. It also expects spending to pass $3 trillion by 2030.
That scale attracts investors, but also raises concern. Overbuilding could leave operators exposed if demand slows. Zayo says it will avoid reckless spending. “We’re making bets that make sense,” Lupe said.
Local resistance also complicates the buildout. Communities increasingly question power consumption and water use. Some regions already feel overwhelmed by proposed facilities. Texas even paused some new data center permitting.
Still, Lupe does not expect the overall trend to reverse. “I don’t think it stops it from happening,” he said. Instead, projects may shift locations or move more slowly.
Permitting remains one of the biggest hurdles. Network builders often wait months for approvals. Lupe called the green light for construction the “long pole in the tent.” He said companies must work with cities, counties, and rights-of-way owners.
Meanwhile, Zayo is also using AI internally. Its new agentic monitoring tools aim to improve network operations. These systems can analyze faults and suggest fixes faster.
Yet Zayo does not want AI replacing engineers. “We believe the decision-making still has to be with the humans,” Lupe said. That cautious stance matters in critical infrastructure.
Space-based data centers may also reshape the discussion. SpaceX, Google, and startups are exploring orbital compute platforms. Lupe views them as another layer in the wider ecosystem. After all, space systems still need ground connectivity.
For now, Zayo remains focused on terrestrial expansion. The company sees strong demand ahead, but also rising responsibility. As Lupe put it, “I’ve got a lot of building to do.”
