A profound restructuring of the cloud is underway. It directly impacts the architecture of the internet—and we need to stop burying our heads in the sand and talk about it. This restructuring will cause significant and rapid changes in infrastructure deployment, traffic patterns and the techno-economics of acquiring and delivering connectivity.
It’s not surprising that AI is driving this change, and we can see its impact in the incredible expansion of data centers, hyperscalers and the latest entrant, neoclouds—a new type of cloud provider specializing in computing infrastructure built for artificial intelligence (AI) and high-performance computing (HPC) workloads.
I’m not here to hype AI. Plenty of people are already doing that and frankly, I have no need to join them to prove the point. I don’t need to speculate on what AI can and cannot do. I don’t need to talk about if or when AI is going to happen. It’s already here, moving so quickly no one can ignore it. But if by some miracle you still aren’t certain about the impact of AI, you will be by the time you read our latest white paper, Cloud 2.0: Because AI won’t run on yesterday’s internet.
Why the Network Is the Unsung Hero of the AI Revolution
To grasp the scale and speed of this transformation, we need to focus on an often-overlooked factor: the network. In this new report, we dive into:
- How to move data smarter for AI
- Why fiber routes and connectivity matter more than ever
- A new way for enterprises to rethink their networks to stay ahead in the AI economy
Buckle up—this is where it gets interesting!
In the white paper, we focus on the network and three critical resources—real estate, power and water—needed for AI training and inference, and the data centers that support those workloads. If you think, “Oh, the internet can handle this like it did broadcast, streaming, shopping, VPNs, cloud connectivity and SaaS, so why worry this time?,” think again. The internet as we know it must change and will change because of the AI effect.
I’ve always been a networking guy–a bitflinger–and Lumen is a networking company. My goal is to explain how AI’s network effects will influence network architecture and telco operations as we adapt to its requirements. In the white paper, I take a conservative view of AI, not a hyperbolic one. Even through that lens, I see that the investments in infrastructure and telco operations required to support AI are unprecedented, with $7 trillion projected across data centers, AI chips, power and network connectivity.1 These investments are going to fundamentally change the architecture of the internet, along with the internet and AI economy.
Figure 1: A $7 trillion investment across data centers, AI chips, power and network infrastructure is reshaping the future of cloud computing.
Yesterday’s Internet Can’t Support Tomorrow’s AI
What I want to emphasize is that we can’t simply map the past—what I call Cloud 1.0—to what’s happening with Cloud 2.0. We need a new mindset. The skyscape has changed: it’s no longer just client-server or web hosting. No more well-known peak and median use patterns. No more Class of Service (CoS) or even stacked headers on packet. We’re venturing into uncharted realms, and our network architecture must evolve to meet this moment.
Network consumption, including pricing and infrastructure, must be reinvented. The old infrastructure is still useful for simple client-server and web hosting interactions, but it’s wheezing and gasping, and it needs rethinking. The frontier of Cloud 2.0 is here—so we need to boldly go, Star Trek style. But let’s be clear: simply strapping more thrusters onto our Cloud 1.0 spaceship won’t get us to warp speed.
Cloud 2.0: Because AI won’t run on yesterday’s internet delves into why, how and where this restructuring is occurring; what enterprises, hyperscalers and data center operators need to do in response to it; and the techno-economics of this major shift.
The Cloud 2.0 frontier is approaching at unprecedented speed, and those who hesitate risk being left behind. It’s time to rethink, rebuild and move beyond the limits of Cloud 1.0. Read the white paper today to learn what it will take to adapt your business.
1Brookfield, Building the Backbone of AI, August 2025.
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