Data centres are expanding at breakneck speed, and fibre networks are racing to keep up.

As operators push into non-Tier-One markets in search of power and underserved markets, fibre deployments are being forced into new, less-connected regions. These builds aren’t just about access; they’re about interconnection too, enabling low-latency links between facilities without piling on energy demands.

But with concerns from the likes of Alibaba’s Joe Tsai over a possible bubble, questions remain about how sustainable this wave of infrastructure investment really is.

Eli Scher, chairman – OIX Association (moderator)
Dan Davis, CEO and founder – Arcadian
Ben Edmond, CEO – Connectbase
A.J. Moul, VP of wholesale – Frontier Communications
Arnab Ghosal, VP and COO – Southern Telecom

Gone are the days of data centres choosing locations based on fibre access, with the panel of experts instead suggesting new projects are instead asking, “Where’s the power?”

Arnab Ghosal, VP and COO at Southern Telecom, revealed the company has 50,000 megawatts in its queue. While not all of that will come to fruition, Ghosal said that Southern foresees around 10,000 megawatts of legit load in the next five years.

“That’s as large as we've ever seen it,” he said, adding that data centres aren’t just looking at metro type cities; instead, he said operators will “site wherever there's energy, and then you chase it with fibre on top of that.”

He added that while full infrastructure builds can take up to five years, partial loads, such as an initial 50 megawatts, may be available sooner, depending on ramp-up needs and location.

A.J. Moul, VP of wholesale at Frontier Communications, said the demand is just coming from hyperscalers, but it’s now the mid-tier facilities who are chasing the power.

“The onus on fibre providers is trying to figure out where those data centres are going, and how do we get our facility out there? Because a data centre doesn't just want one provider, they’re going to want multiple providers, a minimum of four entrances, four unique routes to the nearest metros.”

Moul noted that renewable energy, while important, often isn’t feasible for the scale data centres now demand.

“You can’t cost effectively generate 500 megawatts of power from solar or wind,” he said. “The closest thing that we’ve seen has been Quincy, where you're using hydroelectric to power the data centres.”

Where once Northern Virginia and its ‘Data Centre Alley’ ruled supreme in terms of attracting new facilities, the panel spoke of how rural regions in Montana, North Dakota, and Alabama are increasingly becoming the new hot zones for data centre construction.

As a result, the shift to these emerging rural markets is creating demand for long-haul fibre builds stretching for hundreds of miles.

Dan Davis, CEO and founder of Arcadian, which builds long-haul fibre routes, said firms like his need to “think farther ahead” and keep on top of the power side to keep track of where new data centre projects may go next.

That’s because power, not connectivity, is now the primary constraint. In Davis’ words, data centres need two things: “photons and electrons” – and they’ll go where the electrons are. In many cases, fibre then has to follow, turning what was once a 25-mile metro build into a multi-year, multi-state infrastructure challenge.

The data centre and fibre markets have evolved, but so too has the investment model, with a mix of government middle-mile funding, private equity, alternative business structures, and customer anchor tenants now de-risking multi-year builds.

Davis suggested the capital intensity has risen to such a point that the industry needs to “get smarter” about multiple infrastructure builds at the same time.

Bringing together the relevant parties may not be so easy, as Davis explained: “If you think about the investment community, your energy infrastructure investor is an entirely different group, both on the banking side and the capital side, from your digital infrastructure investor, and yet you're trying to align two different groups throughout our whole ecosystem at the same time. That's probably one reason why it hasn't happened yet.”

The panel discussed the importance of managing two very different phases of risk: the long, high-risk development period and the larger, lower-risk capital required once permitting and anchor customers are in place.

Davis described this early phase as “high-risk dollars,” development work that can span years while only spending 3-4% of the overall project cost.

Frontier’s Moul pointed out that the sheer scale and cost of new builds has pushed timelines further out, with investors and operators increasingly looking at 10-, 20-, or even 30-year horizons.

Yes, you need an anchor tenant,” he said. “But that’s not all you need because a lot of times that anchor tenant is going to want the whole facility.”

For Southern Telecom, the business case often comes from the ability to layer value across multiple domains.

“We’re building fibre for the electric grid to operate,” said Ghosal. “But if you can do that and get data centre service, and then rural broadband, that’s three different business cases. Now you’re stacking, and now you’re maximising capital.

While fibre and power may be the pillars of data centre development, permitting is the bottleneck the panel suggests can quietly derail entire projects.

Arcadian’s Davis shared that a recent 693 mile route between Salt Lake City and Phoenix required 74 separate permit processes.

He explained: “Two states, an independent sovereign Native American nation, five municipalities, six counties, Bureau of Indian Affairs (BIA), Bureau of Land Management (BLM), Department of Defence (DoD), National Park, National Forest... and a partridge in a pear tree,” he joked, emphasising the Kafkaesque complexity involved.

In addition, when builds extend into rural regions not yet covered by a data centre, the permitting landscape becomes even more fragmented and unpredictable. Unlike urban environments where infrastructure corridors already exist, rural routes often require negotiations from scratch, crossing federal land, tribal territories, and multiple jurisdictions.

Southern Telecom’s Ghosal noted that creative legislation is beginning to ease the burden in some states. He referenced that in Alabama, recent law changes allow existing transmission rights-of-way to also carry broadband infrastructure, a change he said has unlocked faster fibre deployments on utility corridors.

The panellists agreed that permitting remains one of the highest-risk and most time-consuming parts of the fibre build cycle.

“Every time you add one more variable, it's not just a plus one in terms of time and risk — it's almost logarithmic in complexity,” Davis added.

As hyperscalers build out massive AI training facilities, the conversation is beginning to shift to inference and what kind of infrastructure that shift will require.

Davis of Arcadian said the architecture required for AI is still unknown: “Maybe the models don’t need to be quite as big as we thought,” he noted. “They're massive 500 megawatt, gigawatt data centres to build [an AI] model. Then maybe a five or six of those strung around the US... maybe it’s 20 smaller data centres.”

Frontier’s Moul suggested AI might follow the path of cloud computing, where large centralised deployments eventually gave way to more distributed infrastructure.

“Edge computing became more important because it needed to deliver at low latency to more and more people in different remote locations,” he said. “I think AI is going to follow a similar trend.”

Ghosal agreed that while efficiency gains may come, they’re likely to be absorbed by demand, noting: “They’ll take that efficiency just to compute more."