Artificial intelligence is driving unprecedented growth in demand for data centre interconnect (DCI) infrastructure, reshaping how data centres are connected and provisioned. Central to this shift are wavelength services—optical connections at 100 Gigabits per second (Gb/s) and above—which are rapidly becoming essential for supporting AI workloads.
AI-related traffic is expanding at a remarkable pace. One major hyperscale operator reported internal AI backbone traffic growing at a 100% compound annual rate. Independent research suggests similar trends, with AI-driven traffic increasing at over 50% CAGR, compared with just 15% for non-AI traffic. This growth is fuelling a global boom in data centre construction and escalating demand for low-latency, high-resilience interconnects to support AI model training and inference.
Wavelength services—delivered via Dense Wavelength Division Multiplexing (DWDM) systems with technologies such as ROADMs and inline amplifiers—are the foundation of this connectivity. Operating at speeds of 100 Gb/s and higher, these links support key protocols including Ethernet, Optical Transport Network and Fibre Channel, linking data centres, enterprise sites and other critical locations.
Service providers are now migrating from 10 Gb/s to 100 Gb/s, and further to 400 Gb/s and 800 Gb/s, mirroring the uptake of 400 Gigabit Ethernet within data centres. Optical equipment vendors are enabling this transition with advances in coherent engines, broader spectral bands—from C to Super-C and C+L—and automation tools like zero-touch provisioning and real-time orchestration via platforms such as the Linux Foundation’s Transport API.
Customers are demanding more than speed. Fast activation, often within 24 hours, flexible provisioning via self-service portals, power-efficient operations and commercial options like pay-as-you-grow models are now baseline expectations. Key differentiators include low-latency routes, five-nines availability, end-to-end encryption and emerging quantum-safe security standards.
Market growth reflects this trend. The global DCI market, worth USD 10.7 billion in 2024, is forecast to reach between USD 25.9 billion and USD 35.9 billion within a decade, growing at 11% to 13.1% CAGR. Hardware—optical transceivers, routers and related infrastructure—accounts for more than half of this value. The U.S. currently leads the market, with key players including Ciena, Huawei, Nokia, Cisco and Fujitsu.
AI data centres themselves are expanding rapidly, with the market projected to grow from USD 13.7 billion in 2024 to nearly USD 79 billion by 2032, at a CAGR of 24.5%. Hyperscale facilities in the U.S. and China are driving this growth, placing intense pressure on power grids and prompting advances in energy-efficient cooling and power systems. AI-specific infrastructure—GPUs, TPUs and ultra-fast interconnects—is becoming the new standard.
Internal and external high-speed interconnects are also evolving, with PCIe Gen5/Gen6, 400GbE and 800GbE technologies supporting the massive data volumes required by AI and high-performance computing. For network operators, the opportunity lies in offering wavelength services that go beyond speed—combining rapid deployment, robust security, high availability and environmental sustainability. Real-time monitoring, automation and flexible pricing models are becoming essential for customers scaling rapidly to meet AI-driven demand.
As AI continues to transform computing, wavelength services are at the core of enabling this shift. With ongoing investment in optical innovation and agile infrastructure, the UK and global markets are poised to support AI’s growth while addressing the complex challenges of sustainability and scale.
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