Optical fiber demand surges due to AI data center expansion

The rapid expansion of artificial intelligence and data center infrastructure is driving significant demand for optical fiber technology. Sterlite Technologies has seen its stock surge approximately 975 percent in seven months, rising from 65 rupees in January to a peak of 910 rupees in September 2026, fueled by the architectural needs of AI facilities.

AI data centers require much denser networks of optical fibers compared to traditional cloud centers due to the high-speed data exchange required by GPUs. For example, fiber requirements per rack are projected to grow from 1,000 in older architectures to 64,000 in upcoming Vera Rubin architectures. Sterlite Technologies reported an 87 percent year-on-year revenue increase in Q1 FY27, with the data center segment accounting for 21 percent of its revenue.

Parallel advancements in next-generation optical communication technology aim to reduce energy loss and latency by minimizing the conversion between optical and electrical signals. Recent demonstrations have shown that using remote GPUs up to 3,000 km away for AI training can limit processing time increases to less than 1 percent, signaling a shift toward more efficient, long-distance AI infrastructure.