Telecommunications companies are rapidly evolving from connectivity providers into builders of AI infrastructure, enterprise platforms and sovereign computing capacity. According to Morningstar DBRS, operators that successfully balance investment with financial discipline are positioned to become some of the biggest beneficiaries of the global AI revolution.
Artificial intelligence has already transformed the technology investment landscape, driving unprecedented demand for computing power, data centres and high-speed connectivity.
While hyperscale cloud providers and semiconductor manufacturers have attracted much of the attention, Morningstar DBRS argues that another sector is becoming equally critical to the long-term success of the AI economy: telecommunications.
According to Morningstar DBRS, telecom operators are rapidly evolving beyond their traditional role as providers of connectivity. Instead, they are becoming essential enablers of AI infrastructure, supporting everything from large-scale data centre developments and edge computing environments to AI-powered enterprise services and intelligent network management.
The ratings agency believes this shift represents one of the most significant strategic opportunities the telecom sector has experienced in decades. Companies that successfully balance investment with financial discipline could unlock substantial new revenue streams while strengthening their long-term competitive positions.
AI creates a new investment cycle
The AI boom has fundamentally changed the economics of digital infrastructure. Every new generative AI model, enterprise AI application and cloud-based workload increases demand for data storage, networking capacity and low-latency connectivity.
Morningstar DBRS believes telecom companies are uniquely positioned to benefit because they already own many of the assets required to support this expansion. Their fibre networks, wireless infrastructure, enterprise customer relationships and operational expertise provide a foundation that newer entrants cannot easily replicate.
Rather than simply transporting data, telecom providers are increasingly becoming integrated participants in the AI value chain. They are investing directly in data centres, developing sovereign AI infrastructure, offering AI-as-a-Service (AIaaS) capabilities and enabling edge computing closer to customers.
This evolution represents a major strategic shift for an industry that has traditionally relied upon connectivity revenues. Instead of competing solely on bandwidth, telecom operators are moving towards higher-value digital services that integrate AI into enterprise operations.
Morningstar DBRS believes incumbent, facilities-based operators are especially well positioned to benefit because of their experience managing complex national networks, navigating regulatory environments and delivering mission-critical infrastructure.
Data centres drive unprecedented spending
Perhaps the clearest illustration of telecoms’ growing AI role can be seen in the explosion of data centre investment.
Morningstar DBRS highlights research from JLL showing that AI and cloud applications are expected to drive an additional 97GW of global data centre demand between 2025 and 2030. Total capacity is forecast to reach approximately 200GW by the end of the decade, effectively doubling today’s market.
Meeting that demand will require extraordinary levels of capital investment.
According to the estimates referenced by Morningstar DBRS, approximately US$1.2 trillion will be needed for physical data centre infrastructure alone, while graphics processing units (GPUs) and associated computing infrastructure could require a further US$1.0 trillion to US$2.0 trillion.
Taken together, global AI infrastructure investment could approach US$2.0 trillion to US$3.0 trillion over the next five years.
For telecom operators, this investment wave presents multiple opportunities. Beyond providing high-capacity connectivity to hyperscale facilities, many operators are investing directly in data centre developments or partnering with AI cloud providers to capture additional value.
Enterprise AI becomes the next growth market
While data centre construction often dominates headlines, Morningstar DBRS argues that enterprise AI services could ultimately prove just as important for telecom operators.
Businesses are deploying AI across customer service, logistics, manufacturing, healthcare, financial services and cybersecurity. However, increasing AI adoption is also making IT environments significantly more complex.
Morningstar DBRS points to findings from DDN’s 2026 State of AI Infrastructure Report, which surveyed 600 IT and business leaders across the US. The research found that 99% of respondents experienced inefficiencies within their AI workloads, while 65% described their AI environments as too complex to manage effectively.
These challenges create opportunities for telecom operators to provide integrated AI-enabled services that combine connectivity with intelligent infrastructure management.
Potential offerings include high-performance cloud connectivity, AI-driven network optimisation, workload management, cybersecurity services and Network-as-a-Service (NaaS). Telecom providers can package these capabilities into integrated solutions tailored for enterprise customers and government organisations that already trust them as long-term technology partners.
Morningstar DBRS believes this transition moves telecom operators away from static infrastructure ownership towards becoming active digital platforms capable of supporting increasingly sophisticated AI workloads.
From internal efficiency to commercial opportunity
Many telecom companies have already been using AI internally for several years.
Applications including predictive network maintenance, customer service automation, churn reduction and operational analytics have generated measurable efficiency improvements across the sector.
Morningstar DBRS believes the industry’s focus is now shifting from operational savings towards direct revenue generation.
Around the world, telecom operators are increasingly positioning AI as a dedicated growth engine through investments in infrastructure, enterprise software, cybersecurity and cloud services.
Several major operators have announced ambitious AI initiatives.
In the US, Verizon is deploying a multi-partner, four-layer AI technology stack expected to be fully operational by November 2026.
Germany’s Deutsche Telekom has launched a €1 billion Industrial AI Cloud initiative focused on enterprise, government and defence customers.
AT&T continues expanding partnerships with companies including Wiliot, Adaptive ML and Derq to strengthen AI-enabled supply chain management, software optimisation and logistics safety.
Meanwhile, Singapore’s Singtel has committed SGD1.2 billion to expand AI-ready data centres supporting sovereign AI services.
For Morningstar DBRS, these initiatives demonstrate that telecom companies are no longer treating AI as a research project. Instead, AI is becoming a central pillar of future commercial strategy.
Early movers begin reporting AI revenue
Some telecom operators have progressed beyond investment announcements by establishing measurable financial targets tied directly to AI.
Morningstar DBRS highlights BCE Inc. as one of the clearest examples.
The Canadian operator has established a target of CAD2.0 billion in AI-derived revenue by 2028 through enterprise AI services, cybersecurity offerings and data centre operations.
That objective is supported by the company’s recently announced CAD1.7 billion, 300MW data centre development in Sherwood, Saskatchewan, which will support AI cloud providers CoreWeave and Cerebras Systems.
Morningstar DBRS estimates BCE’s AI business could represent approximately 7% of consolidated revenue by 2028 while delivering annual growth approaching 40%.
TELUS has adopted a similarly ambitious strategy.
The company reported AI-enabled revenue growth of 22% year over year during the first quarter of 2026 and is also targeting CAD2.0 billion in AI-related revenue by 2028 across TELUS Digital and TELUS Business Solutions.
Its sovereign AI facility in Rimouski, Québec, is already fully subscribed, while construction continues on a larger AI infrastructure cluster in British Columbia expected to reach 150MW and more than 60,000 GPUs by 2032.
Morningstar DBRS estimates AI-related activities could eventually account for around 9% of TELUS’ consolidated revenue.
South Korea’s SK Telecom is following a comparable path after repositioning AI as its primary growth engine following a major cybersecurity incident in 2025.
The operator reported AI revenue growth exceeding 25% during 2025 and almost 48% during the first quarter of 2026. Although AI currently represents only a relatively small proportion of overall revenue, Morningstar DBRS expects that contribution to increase significantly as SK Telecom develops a gigawatt-scale AI cloud facility with NVIDIA.
Balancing opportunity with financial discipline
Despite the optimism surrounding AI investment, Morningstar DBRS also highlights important financial considerations.
Large-scale AI infrastructure requires substantial capital expenditure, while complex construction programmes introduce execution risks and longer payback periods.
Consequently, telecom operators expanding aggressively into AI could experience pressure on credit metrics during the early investment phase.
However, Morningstar DBRS believes these short-term challenges are likely to be outweighed by longer-term benefits if projects are delivered successfully and monetised effectively.
Operators with strong balance sheets, disciplined financial policies and well-executed AI strategies should be best positioned to convert infrastructure investment into sustainable earnings growth.
Rather than viewing telecom companies purely as utility-style connectivity providers, Morningstar DBRS argues investors should increasingly recognise them as builders of the digital foundations supporting the global AI economy.
As AI adoption accelerates across governments, enterprises and consumers alike, telecom operators appear set to become indispensable partners in delivering the infrastructure, computing platforms and intelligent services that power the next generation of Digital Transformation. For Morningstar DBRS, the telecom industry’s evolution has only just begun, and the companies moving first may ultimately emerge as some of the biggest beneficiaries of the AI revolution.
The Morningstar DBRS report can be accessed here: https://dbrs.morningstar.com/research/468155
