You may know Corning for its iconic kitchen manufacturers, like Pyrex and CorningWare. You may keep in mind that Thomas Edison relied on the corporate to develop glass for the sunshine bulb, or that in 1970, Corning invented the primary glass fiber that was helpful for long-distance communication, whereas in 2007 Steve Jobs turned to Corning, which relies in Corning, N.Y., to create the hard-to-shatter glass that now wraps each iPhone.
You in all probability don’t consider it as an AI firm, however a brand new take care of Meta reveals how radically the AI increase is reshaping America’s industrial panorama. The 175-year-old Corning, a longtime fixture of the Fortune 500, has reinvented itself as soon as once more—this time as a essential provider to the world’s largest AI information facilities.
Meta introduced right this moment that it has dedicated to paying Corning as much as $6 billion by 2030 for fiber-optic cable to wire its increasing fleet of AI information facilities. In a CNBC interview, Corning CEO Wendell Weeks disclosed that Corning is increasing a North Carolina manufacturing facility to accommodate rising demand from Meta and different corporations together with Nvidia, OpenAI, Google, Amazon, and Microsoft. When the challenge is full—with funding from Meta—Corning says will probably be the most important fiber-optic cable plant on this planet. The information right this moment despatched Corning’s inventory hovering 16%.
As an alternative of sending info as electrical indicators by copper wire, fiber makes use of strands of ultra-pure glass—each thinner than a human hair—to hold information as pulses of sunshine. In AI information facilities, fiber-optic cable hyperlinks tens of hundreds of GPUs, permitting them to perform as a single supercomputer cluster.
Shay Boloor, chief market strategist at Futurum Equities, informed Fortune the Meta deal is “big” for Corning, possible doubling its annual income from that one deal alone from underneath a half-billion to nearer to a billion per yr as soon as the plant is totally ramped up.
The deal additionally possible received’t be the final one for Corning, as hyperscalers look to lock in provide. “I wouldn’t be surprised to see Microsoft do a similar Corning deal, because a lot of these data center investors are moving past plant construction, and they really fear that shortages are going to show up once they get to that next stage,” Boloor stated.
As my colleague Kristin Stoller reported in Fortune final yr, it hasn’t all the time been easy crusing for Corning. Within the Nineties, Weeks was a Corning vice chairman tapped to run a brand new optical fiber enterprise to energy the burgeoning web—an innovation that drove Corning’s valuation to almost $100 billion on the top of the web bubble in 2000.
That bubble burst the next yr, sending the corporate’s inventory value plummeting from some $100 to $1. However even when Corning misplaced 99% of its worth and needed to lay off half its workers, Weeks continued to develop the corporate’s fiber tech, which is constant to repay throughout the AI information heart increase. Over the previous six months, Corning’s inventory has risen over 100%.
The Meta deal comes at a second when energy has develop into the largest bottleneck for hyperscalers, stated Boloor, pushing corporations to do all the things they’ll to work round a constraint that’s solely getting worse. At this time’s AI information facilities pack racks of GPUs that should be bodily linked at what he calls “insane speeds.”
“Electricity does not move through air, and data does not teleport between racks—the power flows through copper, and the data flows through fiber,” he defined. As AI inference—the day-to-day output of fashions—booms, the “amount of fiber per data center is going to explode.”
This story was initially featured on Fortune.com
