Partner POV | Closing the AI Divide: How Power Utilities Can Make the Difference

This article was written by Kurt Raaflaub, Director of Solution Marketing at Nokia.

Governments, power utilities, and telecommunication providers are racing to close the digital divide. Broadband access is no longer optional. Access to the internet underpins education, healthcare, economic development, and social participation. However, connecting rural markets will take more than fast internet access. What about access to artificial intelligence (AI)? This requires resilient, modern optical networks capable of transporting today's data-intensive services and tomorrow's AI-driven applications from the network core to everyone's door. 

Utilities can make a key difference by bringing data center interconnect (DCI) services to AI and cloud providers and bringing AI services to rural areas with solutions that combine their fiber optic infrastructure with the latest optical networking innovations.

Utilities and the Rise of Fiber-Powered Networks

Forty years ago, utilities started using fiber networks for their operational technology (OT), connecting substations to control centers. Fiber offered low latency, high reliability, and better determinism. It also offered immunity to electromagnetic interference, lightning effects, and ground potential rise, all of which can disrupt copper circuits and wireless links. Utilities began placing fiber along transmission rights of way to create backbones that did not depend on telecommunication providers. 

Since then, many utilities have deployed fiber along transmission and distribution corridors to enable real-time grid monitoring, secure substation control and corporate WAN connectivity. Some have also extended fiber to deliver broadband access services. Utilities need these networks to maintain scalable, simple, secure, and highly resilient operations. 

AI Acceleration: A Network Load Few Expected

AI adoption is reshaping network demand. Enterprises are deploying agentic AI to automate operations, and major tech companies are investing heavily in compute capacity. Analysts predict AI spending will exceed US$500 billion next year (Goldman Sachs), with up to 70% of data center demand driven by AI (McKinsey) and AI compute requirements growing by a factor of 100 (Deloitte). This rapid expansion puts unprecedented pressure on optical transport and DCI networks and accelerates the need to modernize them.

With advances in coherent optics, compact hardware, switching, automation, and encryption, utilities' optical networks can support the demands of AI and their own OT and IT operations. 

DCI-MOFN: A New Revenue Opportunity for Utilities

Modern optical systems can deliver greater than 50 Tb/s of capacity on a single fiber pair. This is more than enough capacity to efficiently aggregate mission-critical OT traffic, AI-heavy IT workloads, and growing broadband traffic across middle-mile networks. Using these systems, utilities can scale their fiber optic networks to support future network applications and business opportunities. 

One of the most promising opportunities for utilities is DCI service delivery. As AI workloads surge, enterprises need massive low-latency transport between data centers. Utilities are already positioned with the requisite power supply and the established fiber routes to offer 100, 400, or 800 Gb/s DCI as a managed service.

With managed optical fiber networks (MOFNs), utilities can serve AI and cloud providers and large enterprises looking for dedicated connectivity. As organizations place data centers closer to end users to support efficient AI inference capabilities for consumers and enterprises, DCI-MOFN will enable utilities to meet their growing demands for higher capacity, lower latency, and stronger data sovereignty options.

Why Data Centers Are Moving to Rural Areas

Data center operators are contending with power and land shortages in urban areas. In some places, such as Virginia in the US, they face multiyear waits for new data center hookups. Rural areas offer lower land costs, renewable energy and water availability, cooler climates, lower disaster risk, and proximity to major fiber routes. AI and cloud providers such as AWS and Microsoft are increasingly building facilities in these regions. Power utilities serve these same areas with electricity and fiber distribution. 

Using Modern Systems to Build AI-Ready, Multiuse Networks

Modern optical platforms offer significantly better fiber capacity and reach performance while affording 99% lower power and 95% lower space requirements compared to optical platforms deployed a decade ago. Utilities can use these newer platforms to create unified, AI-ready networks that support broadband aggregation, middle-mile transport, IT/OT network convergence, and DCI/MOFN business models. This will allow them to scale more cost-effectively than legacy systems while taking advantage of the automation, cybersecurity and protection mechanisms of modern systems to extend broadband access and DCI services to more places. 

The Bottom Line

Rural markets and power utilities have a unique opportunity. Broadband expansion remains essential, but the rise of AI is creating new challenges and opportunities. Many rural regions already have the land, power, and fiber access that next-generation data centers need. By strengthening rural optical transport networks with modern, high-capacity technologies, utilities can support new business models and play a key role in helping these communities participate and prosper in both their digital and AI-driven futures.