“The revenues that we're talking about are meaningful. They've got margins that are equal to or greater than our existing margin structures, and they will begin to impact our revenues and margins beginning next year and grow substantially over the next 5 to 10 years.”

In context

“Daniel Schulman : Yes. But I'd first go a little bit into what you just said. I mean I think we're driving revenue and volumes in the right way. We're redefining our business model as well. The cost structure is improving. Our cost of acquisition down 15%, our cost of retention down 17%. Those are before the Simplicity impacts. And with churn beginning to come down, I think we not only will be able to drive our top line consistently and in an accelerating manner, but also begin to see that manifest itself in our bottom line and cash flow as well. Mike, let me go into what we call AI Connect, our initiative inside the company. But this is the first time we're talking about it publicly. Our first focus was obviously address our mobility and broadband end-to-end customer experience, fix that, launch our new value proposition, put into place our transformation work streams and assure that we have the right cost structure in place to invest where we needed so that we could drive the results that you'seeing and the returns for our investors. And we're clearly beginning to see signs of that success as we look not just at Q2, but as we look ahead. But behind the scenes, it was clear that there was a kind of once-in-a-generation opportunity for Verizon to participate in the massive AI infrastructure build-out. As we talked to hyperscalers, alternative cloud providers, enterprises, there is a need for ever-increasing compute power. I mean, everybody knows that everybody is hearing about it. And the way that, that compute power has moved over the last year or so is, at first, it was about optimizing racks, and then it was basically saying how do we combine racks within a data center to optimize compute power. And now it really is about how do you connect data center to data center to assure that you can optimize and maximize the ever-exploding need for compute. And while that data center connectivity demand is exploding, there's an equal amount of desire and demand to power inference models and applications that need ultra low latency like robotics or remote surgery, autonomous driving and move that out into the edge as opposed to these big massive data centers. And clearly, our long-haul and metro fiber networks, whether that's dark or lit depends on the customer. Some of them want it dark, so they can do the electronics around it. Some of it want it lit. So we do all of the servicing around it. But whether it's dark or lit, our assets are kind of suddenly in tremendous demand for that data center connectivity. And we have thousands of central offices, many of which were taking copper out of, and we are retrofitting them to be remote data centers that are power-ready, permitted, fully redundant infrastructure. And those -- we did a small trial on that and sold out capability in 24 hours. So we're seeing large demand for that as well. We're just announcing this partnership with Google for several of our dark fiber routes for well in excess of $1 billion. The demand for these fiber routes that we currently have and that we are building is ultimately limited and that capacity and pricing is -- we're going to have to think about how we handle the demand for that. We're clearly an attractive player with differentiated assets that are in high demand. We've been building carrier-grade fiber routes for decades. We know how to get it done. We understand permitting. We do our own construction. And we have a solid balance sheet and a solid service reputation that the AI ecosystem needs and counts on. The revenues that we're talking about are meaningful. They've got margins that are equal to or greater than our existing margin structures, and they will begin to impact our revenues and margins beginning next year and grow substantially over the next 5 to 10 years. And as Tony said and I said, these AI Connect revenues are on top of what is an accelerating core mobility and broadband business. We're fortunate to be in a position where our assets and expertise intersect with this kind of generational demand. All of this is success-based kind of capital that we are putting in. And we see this accelerating business plus our AI Connect infrastructure providing us with a very different revenue future than we've had in a long, long time.”