Verizon has signed an artificial intelligence infrastructure agreement with Amazon Web (AWS) worth more than $2 billion, while raising its 2026 outlook for the third consecutive quarter. The company cited record subscriber gains and growing demand for its fiber network, according to Quartz.

What the Verizon-AWS deal covers

Under the agreement, Verizon will provide fiber connections to AWS to support AI systems. The deal will link AWS data centers with high-speed fiber lines to handle the large volumes of data these systems need to process, according to Reuters.

"Technology leaders are choosing our fiber network to support the next wave of AI infrastructure," Verizon CEO Dan Schulman said in a company statement.

The AWS agreement follows a similar move earlier this year, when Verizon signed a separate deal worth more than $1 billion with Google to connect data centers using dark fiber — unused fiber-optic cable that has already been laid and can be activated for a customer's own equipment — as Telco Magazine reported. Finalizing the two agreements positions Verizon to generate additional revenue beyond its core phone and internet services.

A record quarter for subscribers

Verizon added 406,000 postpaid phone customers in the third quarter of the year, a figure more than 820% higher than the same period a year earlier and its strongest Q3 result in five years, Quartz reported. The carrier credited its Simplicity plan, launched in June with fixed prices and unlimited data, with helping to improve results, while reduced discounts on phones lowered costs.

Postpaid phone additions and churn are among the most closely watched barometers in the U.S. wireless industry, because postpaid customers, who pay at the end of a billing cycle rather than in advance, tend to generate more revenue per user than prepaid subscribers.

Postpaid phone churn — the share of such customers who stopped using Verizon — fell to 0.94%, down 0.04 percentage points from a year earlier, according to Telco Magazine. The company also cut the cost of attracting customers through promotions by 41%.

Verizon added 137,000 postpaid accounts during the quarter, representing its best result for that measure in more than 10 years. Broadband net additions totaled 314,000, including 159,000 fixed wireless lines and 155,000 fiber connections, bringing company's total broadband connections to 17.4 million.

Guidance raised across the board

Verizon now expects to add 1.1 million to 1.2 million postpaid phone customers this year, up from its earlier forecast of 750,000 to 1 million, Traders Union reported. The company also raised its earnings forecast to $5.04 to $5.06 per share and now expects free cash flow to grow by nearly 12%, up from the previous estimate of 9% to 10%. Its capital spending forecast was left unchanged at $16 billion to $16.5 billion.

The quarter was not flawless, however. The carrier's revenue rose 1.5% from a year earlier to $34.3 billion but fell short of the $34.74 billion analysts had expected, as revenue from equipment sales dropped 9% because fewer customers upgraded their phones. Revenue from mobile and broadband services increased 2.9% to $23.5 billion. Verizon reported net income of $5.3 billion, or $1.25 per share, along with $7.8 billion in free cash flow, Quartz reported. Its shares rose 2.4% before the market opened.

Fiber as a new AI revenue stream

The deals with AWS and Google illustrate a broader shift among telecommunications companies, which are putting their network infrastructure to work supporting AI. Unlike consumer broadband, these agreements involve dedicated fiber routes linking data centers rather than connections to homes and businesses. Verizon plans to bring fiber internet to more than 32 million homes and businesses by the end of 2026, with a goal of reaching up to 50 million, Telco Magazine reported. More than half of its new fiber customers chose plans with download speeds above 1 gigabit per second.

Verizon's expansion comes against a challenging backdrop in the U.S. data center industry, where rising borrowing costs, construction delays and power shortages are making projects harder to complete on time and within budget, Traders Union reported.