Capital · United States

Dell’Oro: Telecom Capex Rebounds 5% in 1H26

Credited to Converge Digest · convergedigest.com · 21h ago

Worldwide telecom capital expenditures increased approximately 5% year-over-year in the first half of 2026, according to Dell’Oro Group, marking a stronger-than-expected rebound after several years of declining carrier investment. The result represents a notable change from the research firm’s outlook earlier this year, when Dell’Oro projected worldwide telecom capex would decline 2% for full-year 2026. The firm cautions, however, that the first-half improvement does not fundamentally alter its longer-term view of a mature carrier investment environment.

The composition of operator spending is also changing. Following major 5G and fiber coverage investment cycles, Dell’Oro sees carrier priorities moving increasingly toward network capacity, modernization, automation and efficiency rather than broad coverage expansion. Aggregate manufacturer revenue across the telecom equipment markets tracked by Dell’Oro also increased approximately 5% year-over-year during the first half. Those markets span Broadband Access, Microwave and Optical Transport, Mobile Core Network, Radio Access Network, and High End Routing and Aggregation.

Dell’Oro now projects worldwide telecom capex will grow at only a 0% to 1% compound annual growth rate between 2025 and 2030. Capital intensity, which peaked at 18% in 2022, is projected to fall to approximately 14% by 2028 before beginning to increase modestly as early 6G investment emerges. Telecom equipment revenue could perform somewhat better than overall carrier capex, with Dell’Oro forecasting 2% to 3% annual growth through 2030, partly because cloud providers are becoming an incremental source of demand for infrastructure traditionally associated with telecom networks.

Investment Shift — From coverage toward capacity, modernization, automation and efficiency

Capital Intensity — Projected around 14% in 2028, versus 18% peak in 2022

Equipment Outlook — 2%–3% CAGR through 2030, partly supported by cloud-provider demand

“The first half was stronger than we expected, but the improving near-term trajectory does not materially change the longer-term capex story,” said Stefan Pongratz, Vice President at Dell’Oro Group.

The first-half result is significant because it runs ahead of Dell’Oro’s expectations entering 2026 without yet signaling the start of another broad carrier spending cycle. In April, Converge Digest reported Dell’Oro’s forecast for a 2% decline in worldwide telecom capex during 2026 after essentially flat spending in 2025. The new data therefore shows considerably stronger near-term investment than anticipated.

The more important structural signal may be where that money is going. Dell’Oro’s transition from “coverage” to “capacity” describes a different investment phase from the initial 5G and fiber buildouts. Rather than maximizing geographic footprint, operators are increasingly directing capital toward extracting more capacity and efficiency from deployed networks, modernizing transport and core infrastructure, and introducing greater automation.

There is also an increasingly important distinction between telecom operator capex and the addressable telecom equipment market. Dell’Oro expects equipment revenue to grow faster than carrier capex through 2030 partly because cloud providers are purchasing infrastructure in categories traditionally associated with service-provider networks. The result is a networking equipment market increasingly influenced by two investment cycles — relatively mature carrier spending and rapidly expanding cloud and AI infrastructure.

APRIL 2, 2026 · RESEARCH Dell’Oro: Worldwide Telecom Capex to Decline in 2026 The earlier forecast projected a 2% decline in 2026 telecom capex.

MAY 19, 2026 · OPTICAL Dell’Oro: Optical Transport Market to Surge 16% in 2026 on AI Data Center Demand

JUNE 10, 2026 · RESEARCH Dell’Oro: AI Infrastructure Spending Pushes 2026 Data Center Capex Above $1 Trillion

AUGUST 21, 2026 · OPTICAL Dell’Oro: DCI Drives 15% Optical Transport Growth

SEPTEMBER 10, 2026 · RESEARCH Dell’Oro: High-End Routing Market Jumps 25%

🌐 We’re tracking telecom infrastructure, carrier investment, optical transport, routing, RAN and the network modernization cycle at Converge Digest.

Chips & SupplyUnited States

SpaceX Seeks To Join AI Borrowing Bonanza

Credited to Bloomberg$ · bloomberg.com1h ago

Useful

SpaceX is joining the AI borrowing bonanza — seeking $40 billion to secure Nvidia chips. Peter Elstrom explains. (Source: Bloomberg)

View the article · $Bloomberg

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Capital · United States

Google, Constellation Sign Nuclear Deal to Add 890 MW to PJM

Credited to Converge Digest · convergedigest.com · 10h ago

Photograph · Converge Digest

Google and Constellation Energy have signed a 20-year power purchase agreement supporting 890 MW of additional nuclear generating capacity on the PJM Interconnection grid, with more than $4.3 billion of investment by Constellation. The program will upgrade 11 existing nuclear units across six sites in Illinois, Pennsylvania and New Jersey through improvements to equipment, thermal performance and electrical efficiency. The first uprate is expected by 2028, while Google’s companion announcement places delivery of the full 890 MW before the end of 2032.

The companies also signed a separate 15-year energy supply agreement covering 2,700 MW of existing generation in PJM. That agreement provides revenue certainty for operating assets that will continue supplying energy and capacity to the market; the 2,700 MW is separate from the newly added 890 MW. The collaboration incorporates load shaping and demand response to reduce non-critical consumption during grid stress, alongside a framework to evaluate further clean generation, storage and demand-response projects, initially prioritizing PJM.

An expanded five-year technology alliance will deploy Google Cloud and Gemini Enterprise agentic workflows across Constellation’s operations. Initial applications include site selection, power-flow modeling, permitting and interconnection planning; asset health, outage management and construction scenario optimization; and security for operational technology networks. The companies aim to accelerate capacity delivery and improve operating performance and grid resilience. They estimate the nuclear investment program will sustain roughly 4,400 existing jobs and create approximately 7,200 construction jobs during the building period.

• New capacity — 890 MW from uprates at 11 nuclear units across six sites in Illinois, Pennsylvania and New Jersey.

• Delivery — First uprate expected by 2028; full 890 MW expected before the end of 2032.

• Nuclear PPA — 20-year commitment supporting more than $4.3 billion in Constellation investment.

• Existing supply — Separate 15-year agreement covering 2,700 MW of existing PJM generation; this is distinct from the 890 MW expansion.

• AI deployment — Five-year Google Cloud and Gemini Enterprise alliance for planning, asset operations and OT security.

• Grid flexibility — Load shaping and demand response to curtail non-critical consumption during grid stress.

• Employment — Companies estimate 4,400 existing jobs sustained and approximately 7,200 construction jobs created during the building period.

“We’re committed to meeting our growth responsibly by actively investing in clean, reliable power that brings new capacity to our nation’s grids,” said Amanda Peterson Corio, Google’s global head of energy and power.

The agreement uses long-term hyperscaler demand to finance additional output from operating nuclear infrastructure. Its 890 MW expansion is comparable in capacity to a large reactor, but will come from upgrades across existing units. The separate 2,700 MW agreement supports existing supply, making incremental capacity and generation retention two distinct components of the deal.

For AI infrastructure planning, the delivery schedule matters: the first uprate is expected by 2028, with the full program expected before the end of 2032. The announcement does not provide plant-by-plant capacity allocations, a detailed commissioning schedule, power pricing or quantified AI performance targets. Its affordability and operational benefits remain stated objectives; the disclosed commitments establish the scope of investment and capacity, rather than measured customer-bill savings.

Leadership — Joe Dominguez, chairman, president and CEO

Company history — Became an independent publicly traded company in February 2022 following separation from Exelon.

Business — Electricity generation and competitive energy supply, including nuclear, natural gas and renewable generation.

Generation portfolio — 55 GW across its fleet, as reported in the October 6, 2026 announcement.

Markets — Residential and commercial energy customers; industrial loads; hyperscale and AI data centers.

New agreement — Google-backed 890 MW nuclear uprate program; separate 2,700 MW existing-supply agreement.

Headquarters — Mountain View, California, United States

CEO — Sundar Pichai, CEO of Google and Alphabet

Founded — 1998; founders Larry Page and Sergey Brin

Platforms — Google Cloud, Gemini, Search, YouTube, Android and Workspace.

Infrastructure — Hyperscale data centers, AI computing and global cloud infrastructure.

Energy strategy — Long-term procurement supporting nuclear uprates, plant restarts, advanced nuclear, renewables and demand flexibility.

New agreement — 20-year nuclear uprate PPA; 15-year existing-supply agreement; five-year technology alliance with Constellation.

September 9, 2026 Nuclear / AI Infrastructure — Google Commits €13 Billion to Finland AI Infrastructure and Nuclear Power Links Google’s data center expansion to a long-term Fortum nuclear agreement, uprates and storage.

February 9, 2026 Data Center Power — CyrusOne Secures Over 1.1 GW of Power Capacity in Texas with Constellation Examines Constellation’s generation-adjacent approach to supplying large data center loads.

October 29, 2025 Nuclear Restart — Google and NextEra to Restart Iowa’s Duane Arnold Nuclear Plant Shows how Google’s long-term power commitment supports the planned return of a retired reactor.

October 14, 2024 Advanced Nuclear — Google Taps Kairos Power to Develop Advanced Nuclear Reactors Provides the advanced-reactor counterpart to Google’s existing-fleet uprate strategy.

September 20, 2024 Nuclear / PJM — Microsoft Taps Three Mile Island Nuclear Power for Data Centers Covers Constellation’s earlier hyperscaler-backed nuclear restart agreement in the PJM region.

🌐 We’re tracking the power systems supporting AI infrastructure, including nuclear generation, storage and grid flexibility. Follow our ongoing coverage at https://convergedigest.com/category/ai-infra/