Introduction

You might have heard, but this AI thing has companies building quite a few data centers. With a veritable arms race in progress, the number of data centers being constructed has exploded. 

Simultaneously, each data center is becoming more dense. As we approach the limits of on-chip performance in our pursuit of more capable Large Language Models (LLMs), companies are increasingly "clustering" chips together. That sounds a bit bottleneck-y, right?

You might be wondering if we are doing a rerun here, after having covered interconnects inside the server a couple months ago, but no. We’re not talking about connecting your GPU to your CPU, we’re talking about connecting the data center to everything else (including other data centers).

These clusters are getting so large that they have to be distributed across physical spaces organized as campuses. Each one of these clusters has to be connected to the other clusters, and then each data center needs to be connected with the other data centers. 

Every cluster and every data center represents a node in the communications network. 

It’s not just the number of these nodes that has inflected upward in parabolic trajectory, it’s the quantity of data they’re transmitting along the network. It isn’t just data centers. Everything from your smartphone, to your PC, to your smart thermostat, and robot vacuum…all nodes, all in need of communication. And, what’s more, more communication as they get more advanced.

Your eventual AI assistant and the AR / VR headset you’ll use to interface with it (at least until holographic communications are ready), the surgical robots and the industrial automatons executing commands with nanometer precision, each will represent another node. The future is a story of nodes—or, more specifically, a story about more nodes communicating with each other.

Communication between nodes occurs across spans. 

Spans are the connections across which information is transferred. They can be physically wired networks or invisible wireless ones. As they carry more information between an exponentially growing number of nodes with ever-increasing demands for speed and bandwidth, spans are becoming increasingly crucial in our modern world. 

The expansion of networks, particularly through the deployment of fiber optics, is not just about meeting current demand. It’s also about future-proofing for anticipated needs. As network coverage broadens and capabilities increase, it unlocks new use cases and markets, such as smart cities, autonomous vehicles, and industrial automation.

Our techno-utopian future hinges on the capability of these spans to meet our growing needs.

And there are plenty of companies that will rise to the task. 

The bad news first: The spans are not up to the task.

With all of this new demand for connectivity, you might expect that there has been massive new investment in connectivity. On the contrary, the companies responsible for building and maintaining our communications networks have significantly underinvested, not just for future demand, but for the demand that exists right now. 

The good news: that creates an excellent opportunity for investors like us.