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 the glass for the lightbulb, 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 is predicated in Corning, NY, to create the hard-to-shatter glass that now wraps each iPhone.
You most likely don’t consider it as an AI firm, however a brand new take care of Meta exhibits 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 vital provider to the world’s largest AI knowledge facilities.
Meta introduced in the present day that it has dedicated to paying Corning as much as $6 billion by way of 2030 for fiber-optic cable to wire its increasing fleet of AI knowledge 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 it will likely be the most important fiber-optic cable plant on this planet. The information in the present day despatched Corning’s inventory hovering 16%.
As a substitute of sending data as electrical alerts by way of copper wire, fiber makes use of strands of ultra-pure glass—every one thinner than a human hair—to hold knowledge as pulses of sunshine. In AI knowledge facilities, fiber optic cable hyperlinks tens of hundreds of GPUs, permitting them to operate as a single supercomputer cluster.
Shay Boloor, chief market strategist at Futurum Equities, informed Fortune the Meta deal is “large” for Corning, seemingly doubling its annual income from that one deal alone from underneath a half-billion to nearer to a billion per 12 months as soon as the plant is absolutely ramped up.
The deal additionally seemingly gained’t be the final one for Corning, as hyperscalers look to lock in provide. “I wouldn’t be stunned to see Microsoft do an identical Corning deal, as a result of lots of these knowledge heart traders are shifting previous plant building and so they actually concern that shortages are going to point out up as soon as they get to that subsequent stage,” Boloor mentioned.
As my colleague Kristin Stoller reported in Fortune final 12 months, it hasn’t all the time been clean crusing for Corning. Within the Nineteen 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 just about $100 billion on the top of the web bubble in 2000.
That bubble burst the next 12 months, 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 in the course of the AI knowledge heart increase. Over the previous six months, Corning’s inventory has risen over 100%.
The Meta deal comes at a second when energy has change into the largest bottleneck for hyperscalers, mentioned Boloor, pushing corporations to do every little thing they will to work round a constraint that’s solely getting worse. Right this moment’s AI knowledge facilities pack racks of GPUs that have to be bodily linked at what he calls “insane speeds.”
“Electrical energy doesn’t transfer by way of air, and knowledge doesn’t teleport between racks—the ability flows by way of copper, and the information flows by way of fiber,” he defined. As AI inference—the day-to-day output of fashions—booms, the “quantity of fiber per knowledge heart goes to blow up.”
