Verizon Signs $2B AI Deal and Raises Earnings Outlook
The carrier is pivoting its infrastructure toward AI connectivity as consumer phone upgrade cycles hit a slowdown.
Updated on Oct. 26, 2026 in Telecommunications
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Verizon added 406,000 monthly-bill paying wireless subscribers in the third quarter and signed a $2 billion AI infrastructure agreement with Amazon Web Services. The company raised its annual adjusted earnings per share forecast to between $5.04 and $5.06 following these results.
Why it matters
Rising demand for AI computing is providing new revenue opportunities for telecommunications providers, helping to offset the slowing pace of consumer mobile device upgrades. This shift towards data-center infrastructure support is becoming a core component of the business model for national carriers.
Verizon reported third-quarter revenue of $34.3 billion against analyst estimates of $34.74 billion. The carrier now projects 1.1 million to 1.2 million postpaid phone subscriber additions for the full year.
The players
Verizon
A major U.S. telecommunications carrier focused on mobile network expansion and enterprise fiber infrastructure.
Amazon Web Services
The cloud computing arm of Amazon that provides global infrastructure for enterprise AI and data processing.
A major provider of search, cloud computing, and data-center infrastructure services.
The details
The new agreement with Amazon Web Services tasks Verizon with providing high-capacity fiber-optic connectivity to support massive AI computing workloads within data centers. This move follows a July $1 billion deal with Google to similarly connect their data-center infrastructure. Simultaneously, the company is seeing lower device upgrade volumes as users hold on to hardware longer, prompting a reduction in device subsidies.
Timeline
June 2026: Verizon launched the Simplicity plan.
July 2026: Verizon announced a $1 billion data-center agreement with Google.
Q3 2026: Verizon recorded 406,000 net wireless subscriber additions.
October 26, 2026: Verizon raised annual forecasts and finalized the AWS AI infrastructure deal.
Full-year 2026: Verizon projects 1.1 million to 1.2 million postpaid subscriber gains.
The Tech Race
Verizon is shifting its capital expenditure focus toward the AI-native data center market to compete for enterprise connectivity contracts. This aligns with a broader industry pivot among major carriers to monetize back-end digital infrastructure as consumer mobile growth plateaus.
Customers may notice reduced device subsidies as the carrier adapts to longer mobile replacement cycles. The company is leaning into its Simplicity plan, introduced in June, to retain subscribers amidst these shifting hardware purchasing habits.
The takeaway
Verizon is transitioning from a traditional mobile provider to a key provider of connectivity for AI workloads. Watch the company's capital expenditure reports in the next quarter for concrete evidence of the $2 billion AWS investment translating into tangible service revenue.
Further reading
Explore deeper trends in the Telecommunications sector to understand how carriers are modernizing their infrastructure.
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