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The generative artificial intelligence boom is driving new business and stock performance for a major telecommunications company.
Lumen Technologies, which provides fiber networks necessary for AI data processing, announced Monday it has $5 billion in new business from companies looking to install more fiber cables as it “becomes increasingly valuable and potentially limited, due to booming AI needs.” The company added it is discussing another $7 billion in potential deals as customer demand grows.
“The AI economy is changing business operations, and companies are recognizing they need powerful network infrastructure to manage the unprecedented data flows today and the demand in the future,” Kate Johnson, Lumen Technologies chief executive, said in a statement. “Our partners are turning to us because of our AI-ready infrastructure and expansive network. This is just the beginning of a significant opportunity for Lumen, one that will lead to one of the largest expansions of the internet ever.”
The telecom company’s stock was up around 93% at $5 per share at the market close on Tuesday. Its shares are up 164.6% so far this year.
In July, Lumen announced a partnership with Microsoft to use the tech giant’s cloud computing platform, Azure, for its organization-wide digital transformation and AI efforts. Meanwhile, Microsoft chose the telecom company to provide more network capacity for its data centers.
Lumen announced its second-quarter financial results on Tuesday. The company reported a net loss of $49 million in the second quarter of 2024, compared to an $8.7 billion net loss a year ago that included a non-cash goodwill impairment charge.
“The rising demand of AI is requiring greater connectivity between data centers, and Lumen’s world class fiber network and forward-thinking digital services are positioning us to help drive the AI growth wave,” Johnson said in the statement. She added that the company feels “confident” in its growth amid the AI demand.