Closing the AI divide in rural markets: Why modern optical networks matter more than ever
Improving access to artificial intelligence (AI) in rural markets is one of several topics I look forward to discussing at DISTRIBUTECH International 2026 in San Diego. How big is this new business opportunity for power utilities?
Governments, power utilities and telecommunication providers are racing to close the digital divide. Broadband is no longer optional because it underpins education, healthcare, economic development and social participation.
But connecting rural markets takes more than last-mile fiber. It requires resilient, modern optical transport networks that can support today’s digital services and tomorrow’s AI-driven applications as their data travels from the network core to your door.
Utilities and the rise of fiber-powered networks
Utilities are increasingly deploying fiber along transmission and distribution corridors to enable real-time grid monitoring, secure substation control and corporate WAN connectivity. Some are also extending this fiber to deliver broadband services.
These fiber-powered networks must be scalable, simple, secure and highly resilient. Advances in coherent optics, compact hardware, switching, automation and encryption now make this possible. Modern optical systems efficiently aggregate mission-critical operational technology (OT) traffic, AI-heavy IT workloads and growing broadband traffic across middle-mile networks.
DCI-MOFN: A new revenue opportunity for utilities
One of the most promising opportunities for utilities is data center interconnect (DCI). As AI workloads surge, enterprises need massive amounts of low-latency transport between data centers. Utilities, which are already positioned with the requisite power supply and near-long-haul fiber routes, can address this need by offering 100, 400 or 800 Gb/s DCI as a managed service.
These managed optical fiber networks (MOFNs) can serve cloud and AI providers and large enterprises that are looking for dedicated connectivity. As data centers are distributed closer to the network edge, they can better support consumer and enterprise AI inference use cases. This results in increased demand for higher capacity, lower latency and stronger data sovereignty interconnect options.
AI acceleration: A network load few expected
Rapid AI adoption is reshaping network demand. Enterprises are deploying agentic AI to automate operations, while major tech companies are investing heavily in compute capacity. According to Goldman Sachs, AI spending will exceed $US500 billion next year. Deloitte estimated that power demand from AI data centers in the US could grow more than 30-fold by 2035. McKinsey says up to 70% of data center capacity demand will come from AI by 2030.
This rapid expansion places unprecedented pressure on optical transport and DCI networks and creates an urgent need for them to be modernized.
Why data centers are moving to rural areas
Urban regions face power and land shortages. Some, like those in the state of Virginia, have multiyear waits for new data center hookups. Rural areas offer lower land costs, renewable energy, greater water availability, cooler climates, lower disaster risk and proximity to major fiber routes. Cloud and AI providers such as AWS and Microsoft are building more facilities in these regions.
Building AI-ready multiuse networks
Today’s optical platforms are compact, modular and energy efficient. Programmable pluggable versions of coherent optics deliver 100G to 800G data rates across thousands of kilometers without needing costly regeneration.
These technologies bring utilities the benefits of lower power per bit and smoother migration to emerging 800G-enabled routers, along with the advantages of open, multivendor environments. Utilities can use them to create unified networks that support broadband aggregation, middle-mile transport, IT/OT network convergence and DCI/MOFN business models. These networks will have smaller footprints and lower cost than legacy systems and offer the automation and protection mechanisms of modern systems.
The bottom line
Rural markets and power utilities have a unique opportunity. Broadband expansion remains essential, but the rise of AI is creating new demands and value. Many rural regions already have the land, power and fiber access required for next-generation data centers. By strengthening rural optical transport networks with modern, high-capacity technologies, utilities can play a key role in helping rural communities participate and prosper in the digital- and AI-driven future.
I’m looking forward to learning and sharing more with you at DISTRIBUTECH International 2026. If you can’t make the conference, please follow us for future thoughts and news.
