Thursday, August 6, 2026

Lumen reinvents itself as the fiber network behind AI and enterprise—from Anthropic to the Yankees

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Good morning. Lumen Technologies has been transforming from a traditional telecom operator into a key player in AI networking, with clients including Anthropic and the New York Yankees.

“The transformation that we’re driving is really starting to take hold,” President and CFO Chris Stansbury told me, pointing to Gartner recently naming Lumen the company “to beat” in enterprise wide area network (WAN) and connectivity services for AI. Telecom carriers used to sell connectivity and deploy physical networks, then ceded the software layer—firewalls, load balancers, and software-defined WAN—to big tech, he said. Lumen’s acquisition of Alkira, a cloud networking platform for multi-cloud environments, reverses that.

“It doesn’t matter who owns the fiber, and it doesn’t matter which cloud your data is in,” Stansbury said. Lumen can move data across networks and clouds it doesn’t own, positioning itself as neutral infrastructure for the AI-driven economy, he said.

The financial logic matters as much as the technology. Stansbury and Kate Johnson, CEO of Lumen (No. 354 on the Fortune 500) have worked together for about four years, first stabilizing the company and its balance sheet. Stansbury inherited $10 billion of debt maturing in 2027 across three competing borrowing entities. Lumen cut its dividend, restructured with creditors, refinanced debt and sold non-strategic assets, reducing total debt below $13 billion under a single entity, he said.

That allowed Lumen to acquire Alkira and “get aggressive on network-as-a-service (NaaS) in terms of customers’ ability to access the network,” Stansbury said. NaaS is growing 20–30% quarter over quarter, versus about 1% annually for the legacy “north-south” networking market, he said.

He added that capital intensity is falling even as Lumen builds toward 47 million fiber miles by 2028 and 58 million by 2031, backed by nearly $13 billion in private connectivity fabric deals, including an Anthropic contract announced earlier this year that will expand the AI startup’s fiber-optic network across North America.

Last month, Lumen announced a partnership with the Yankees, who need consistent connectivity across two venues: Yankee Stadium and their spring training facility in Tampa. NaaS gives them a uniform network experience at both sites while letting the team add services themselves—by “pointing and clicking”—rather than waiting on custom engineering, Stansbury said. The innovation is elasticity: traditional networking forced customers to provision for peak demand year-round, but spring training doesn’t need regular-season bandwidth, so the Yankees can scale up or down on demand, he said, putting “network design and consumption in the hands of the user.”

Lumen reported second-quarter revenue of $2.805 billion, beating estimates by about $50 million. Total business revenue slipped slightly year over year to $2.44 billion, but strategic revenue rose 14% to $1.289 billion, now 53% of total business revenue. On Tuesday’s earnings call, Johnson said Lumen is combining physical infrastructure, a programmable network and a connected ecosystem “in a way no other traditional telecom company is.”

Morningstar’s Michael Hodel wrote that revenue trends appear to be improving, though competition for AI-related fiber deals is intensifying. The firm maintained its $7.50 fair value estimate and no-moat rating.

On the AI boom, Stansbury said nobody knows who will win the large language model race, but “the constraint is the network.” That bet—that Lumen becomes indispensable regardless of which AI players prevail—is central to its strategy.

Sheryl Estrada
Sheryl.Estrada@fortune.com

Leaderboard

Jeremy Hofmann, CFO of Zillow Group, Inc. (Nasdaq: Z and ZG), was appointed to the additional role of chief operating officer. In this expanded role, Hofmann will oversee both Zillow's financial strategy and day-to-day operational execution. The board expanded Hofmann's role because of his proven track record as CFO and his understanding of operational dependencies across the business during his nine years at the company, according to the announcement. Jun Choo, who has held the role of chief operating officer since November 2024, is stepping down to focus on his health and will serve in an advisory capacity through the end of 2026.

Matt Newcomb, CFO of financial technology company Chime, is stepping down, effective Aug. 7. Mark Troughton, Chime's president, will take on the role of interim CFO. Troughton is a seasoned public company executive and chartered accountant. The company has initiated an executive search for a permanent CFO. Newcomb has had a decade-long tenure and led Chime's June 2025 IPO. He will remain with the company as an advisor during the search and leadership transition period.

Big Deal

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Seventy-nine percent of CFOs identified cost savings as the most important metric when hiring globally. However, every CFO surveyed admitted their organization had suffered financial losses due to noncompliance when expanding globally. More than three-quarters (78%) of CFOs reported losing up to $1 million and 22% reported losing over $1 million in noncompliance-related losses when expanding globally.

These challenges have contributed to an overall reluctance among CFOs to actively pursue global expansion. More than a third (37%) of CFOs said their organization is prioritizing domestic hiring over international hiring, planning to decrease cross-border hiring, or both. Just 22% of CFOs said their organization has plans to hire globally in the next six months.