At PTC’26 in Hawaii, a panel of hyperscale and wholesale operators comprising Google, Meta, EXA, and SCCN dissected the mounting pressures on Atlantic subsea infrastructure. With spiralling AI visitors, impending end-of-life techniques, and hyperscalers dominating new builds, the business faces a wholesale provide crunch.
In sum – what to know:
Provide crunch – with seven of 21 Atlantic cables nearing retirement and hyperscalers prioritizing inner demand, the business faces a possible shortfall in trans-Atlantic wholesale capability by 2027.
Mesh range – distributed landings have created a resilient “switching mesh”, however a scarcity of recent transatlantic routes to them means rising AI-driven demand might quickly overwhelm the system.
Subsea tensions – hyperscalers more and more construct subsea cables to fulfill their very own visitors wants, leaving wholesalers reliant on leftover capability, elevating questions on who invests, builds, advantages.
Right here’s a fast snapshot of a superb workshop-panel session about subsea cable within the AI period at PTC’26 in Hawaii final week (January 18; see extra right here, right here, right here), which coated the gamut of technique and intrigue, and all types of different shenanigans, because the subsea business will get to grips with the problem to move ever-higher volumes of information visitors world wide. Word, this isn’t a full report of the session; there was an excessive amount of to slot in a single article (and RCR might choose up the thread once more). However here’s a run-down of a few of the details, as offered by a high quality mixture of hyperscale suppliers (Google, Meta) and wholesale operators (EXA Infrastructure, Southern Cross Cable Community).
The preliminary focus was about trans-Atlantic infrastructure – given the earlier session’s tackle the Pacific, addressed later right here as effectively, and since the area brings sure tensions within the subsea sector into sharpest focus, particularly as AI explodes enterprise fashions and visitors patterns. These embody points with the possession and operation of subseas routes, amid the power-shift to money-bags hyperscalers with escalating non-public demand, in addition to with authorities intervention to fund and defend ‘vital’ infrastructure in a fractured geopolitical local weather. The panel was effectively stewarded by Thomas Soerensen, in command of international subsea options at fibre-optic vendor Ciena.
The large level, from the beginning, is {that a} crunch is coming on this previous subsea-stronghold. Jim Fagan, chief government at EXA Infrastructure, mentioned: “The explanation the Atlantic isn’t spoken about as a lot because the Pacific, or the Purple Sea, is that it’s simply not the sexiest cable area. It’s thought of good and constant; it’s the world’s highest visitors route.” There are 21 particular person cables within the Atlantic, “east to west”, famous Nigel Bayliff, senior director for international submarine networks at Google. “We must always pat ourselves on the again. We’ve helped the world survive this large inflow of information [so far].” Capability per cable has jumped by “279,000 occasions” because the first PTAT line was landed in 1988, he mentioned.
“We’ve helped as a lot as we are able to.” However the system is at full stretch. Seven of its 21 routes can be retired “comparatively quickly”, mentioned Bayliff. “That could be a downside as a result of that begins to scale back that reliability mesh” – which means community resiliency from community range. Plus, after all, the AI phenomenon is driving visitors demand by means of the roof. For its half, EXA Infrastructure carried 4 occasions as a lot visitors on its Atlantic channels in 2025 than it did within the earlier three years mixed (2022-2024), advised Fagan. That is partly as a result of it has picked up three routes through the buy of Irish subsea specialist Aqua Comms for a knockdown charge. However the sample is obvious, he mentioned.
“We’re seeing the expansion, and I’d like to say it’s as a result of we’re crushing it, however all of the boats are rising.” There’s one other concern: the business has constructed route range, even because the variety of Atlantic crossings has stuttered to a halt, with distributed landings and coastal mesh connectivity spreading visitors alongside the coasts, somewhat than concentrating it in a handful of hubs. Bailiff commented: “The factor that’s modified [in the Atlantic] over fairly an extended interval is that this transfer to distributed landings. Going again 10/20 years, visitors was very concentrated. To unfold visitors up and down the western seaboard of Europe and the Jap seaboard of North America, there have been a number of new routes.”
The impact has been to create ‘mesh’ worth over point-to-point capability, and pivot subsea lanes in the direction of visitors flexibility, failover optionality, and geographic range. Even when the variety of ocean cables has been flat, and will but decline, the variety of usable paths has elevated with extra landings per system (and higher optical attain). It underscores the issue: the system rely is static, as but, and these distributed landings stretch the system. The business has compensated for fewer techniques by being smarter with the place it lands them; the mesh masks fragility, in a approach – till it’s overwhelmed with AI-style demand, and it doesn’t, and the entire thing topples over.
“Extra cables is certainly the reply,” mentioned Bayliff. “The problem goes to be what number of we are able to construct, and the way rapidly [we can build them] to as many various factors as doable. That’s the solely approach ahead.” Extra landings, as effectively – is the instruction. Shifting focus, he mentioned later: “Nevertheless they’re constructed, whoever’s constructing them, extra cables to typically the identical location – so we are able to create these switching meshes – is the way in which ahead.” However that final level, about who builds new crossings, is a bone of competition. For Fagan at EXA Infrastructure, the query is not only theoretical: his agency owns the 2 latest “non-hyperscaler” routes throughout the Atlantic, and needs to construct extra.
The stress, effervescent below on the panel at PTC, is that wholesalers like EXA Infrastructure and Southern Cross Cable Community have historically constructed cables and bought capability to carriers, telcos, and in addition to hyperscalers. However for a decade, because the cloud turned greater than only a shopper repository for smartphone pictures, hyperscalers have constructed a lot of the new trans-Atlantic and trans-Pacific subsea infrastructure themselves. Since AI has began to spike uncontrollably, their agenda has shifted – to construct for their very own wants first, preserve any extra for inner visitors, and solely launch it to the wholesale market as a final resort.
Fagan acknowledged: “My associates right here (Google and Meta, on the panel)… speak [in their announcements about new subsea systems] about their wants and what they’re going to maintain. So we face a extreme provide crunch within the Atlantic, most likely late 2027. If you concentrate on the [new] knowledge heart visitors and flows, it will create fairly an issue. At this level, the query is how to ensure there may be sufficient wholesale capability for the remainder of the market. And for us, we predict perhaps it’s time for personal cable once more. Which isn’t one thing I mentioned right here two years in the past. So the dynamics have modified fairly a bit within the Atlantic – from simply type of a set-and-forget for the final 20 plus years.”
Which, like we warned on the prime of the piece, brings us to a untimely cease; RCR must file this story earlier than it’s completed. Hopefully we are going to write extra from this fascinating panel session at PTC, with some growth on this wholesale/hyperscale rigidity with commentary as effectively from Southern Cross Cable Community and Meta, plus the collective narrative across the realities of route planning – based mostly on permits somewhat than physics, and on hyperscaler “insurance coverage cables” that don’t make industrial sense – in addition to the “double-edged sword” of presidency designation of the sector as ‘vital infrastructure’. Like we mentioned, good panel, heaps to digest.
