AI Is Changing the Economics of International Connectivity
6/11/26, 3:00 pm
Artificial intelligence is usually discussed in terms of models, computing power and data centres.
Less attention is paid to what happens between them.
AI workloads do not exist in isolation. They sit within a much larger digital infrastructure ecosystem that includes cloud platforms, data centres, terrestrial networks and the international connections that move information between markets.
As investment in AI and hyperscale infrastructure grows, that underlying connectivity becomes increasingly important.
For countries separated by oceans, including Australia, New Zealand and much of the Pacific, this raises a deceptively simple question.
If the digital economy is becoming more data-intensive, how should the infrastructure connecting it evolve?
The answer involves more than simply building more capacity.
AI is also an infrastructure story
The extraordinary visibility of AI can make it easy to think of the technology primarily as software.
But digital services ultimately depend on physical infrastructure.
Data centres need power. Cloud regions require network connections. International applications depend on information moving reliably between markets. And across oceans, much of that movement relies on submarine cable systems.
AI adds another source of demand to an environment that was already changing.
Cloud adoption continues to expand. Digital media and content delivery continue to grow. Data centre ecosystems are becoming larger and more interconnected. Governments increasingly see digital infrastructure through the lens of resilience and sovereignty as well as economic development.
AI sits on top of those trends rather than replacing them.
That means the infrastructure question is becoming broader: not simply how much international capacity will be required, but where it will be required, how resilient it needs to be and how effectively it can adapt as patterns of data movement evolve.
Capacity is only part of the equation
More data generally creates demand for more network capacity.
But capacity alone is an incomplete measure of a strong international network.
Imagine two markets connected by significant bandwidth but dependent on a limited number of physical routes. Capacity may appear substantial until an interruption affects one of those routes.
For network owners, cloud providers and governments, the value of international infrastructure therefore increasingly lies in a combination of characteristics.
Capacity matters.
So do route diversity, geographic redundancy, landing options, latency, operational reliability and the ability to expand over time.
The result is a different infrastructure conversation.
Instead of asking only, “How much bandwidth will we need?”, organisations increasingly need to consider, “How should that capacity be distributed, connected and protected?”
AI makes that question more pressing because the digital environments being supported are becoming simultaneously more demanding and more important.
Geography becomes an economic consideration
The internet can make distance feel almost irrelevant.
Infrastructure does not have that luxury.
The route data takes between markets has an effect on how digital ecosystems are connected. More direct international paths can improve access between major cloud and data centre locations, while additional routes can reduce dependence on individual corridors.
For Australia, New Zealand and Pacific markets, geography is particularly significant.
International connections travel substantial distances before reaching many of the world's largest digital ecosystems. Island nations and geographically isolated communities can face an even greater infrastructure challenge.
As cloud regions and AI-related infrastructure continue to develop, the location of international capacity can therefore influence more than telecommunications performance.
It can affect where digital infrastructure can grow, how effectively markets connect with one another and how confidently organisations can rely on those connections.
Submarine networks are consequently part of the economic geography of the digital world.
Fast-moving technology meets long-life infrastructure
There is an awkward mismatch at the centre of digital infrastructure planning.
The applications running across networks can change extremely quickly.
The networks themselves cannot.
A submarine cable system may be designed to operate for more than 25 years. Once installed across thousands of kilometres of ocean, changing the physical infrastructure is considerably more difficult than updating the technology running in a data centre.
That difference in timescales matters.
Nobody can predict precisely how AI architectures, cloud environments or patterns of international data movement will develop over the complete life of a submarine network.
Infrastructure therefore needs to accommodate uncertainty.
Capacity planning must look beyond current demand. Network architecture needs to consider future scalability. Technology evolution has to be anticipated. Open cable approaches and advances in optical transmission can provide greater flexibility as terminal technology develops.
The objective is not to predict every future workload correctly.
It is to avoid designing long-life infrastructure so tightly around today's requirements that tomorrow's opportunities become difficult to support.
Resilience has an economic value
Route diversity is sometimes treated largely as an engineering concept.
Increasingly, it is an economic one as well.
When businesses, cloud platforms, government services and digital ecosystems depend on international connectivity, disruption can have consequences well beyond the network itself.
Greater geographic diversity can reduce exposure to individual routes or points of failure. Alternative landing locations can provide additional options. Resilient architectures can strengthen continuity when infrastructure is disrupted.
The more important digital services become to economic activity, the more valuable that resilience becomes.
This does not mean every market requires unlimited redundancy.
It does mean the economic case for international infrastructure increasingly has to consider the consequences of dependency as well as the cost of capacity.
For governments, that can intersect with national resilience and digital sovereignty objectives.
For network owners, it can influence service continuity and competitive positioning.
For cloud and data centre operators, it can affect how reliably major digital ecosystems remain connected.
The economics of connectivity therefore extend beyond the price of moving data from one point to another.
Infrastructure decisions are moving upstream
One consequence of these changes is that submarine connectivity needs to be considered earlier in digital infrastructure planning.
A new cloud region or data centre does not exist independently of the networks connecting it to customers, partners and other facilities.
Likewise, ambitions for AI, digital government or regional technology investment ultimately depend on infrastructure capable of supporting substantial and reliable data movement.
That creates a stronger relationship between decisions that were once viewed separately.
- Where should digital infrastructure be located?
- Which international markets should it connect to?
- How diverse are those connections?
- Where are the landing points?
- How easily can capacity scale?
- What happens if one international route becomes unavailable?
These are network questions, but increasingly they are also strategic investment questions.
The quality of international connectivity can influence the environment in which digital growth takes place.
Planning for demand we cannot yet see
The most important impact of AI on submarine infrastructure may therefore be less about today's traffic than tomorrow's uncertainty.
International networks being planned now could remain operational well into the 2050s.
Over that period, AI will change. Cloud architectures will change. Data centres will change. Applications that do not yet exist will emerge.
The underlying requirement, however, is unlikely to disappear.
Digital economies will need reliable ways to move increasing volumes of information between locations.
That places a premium on infrastructure capable of supporting growth without sacrificing resilience, flexibility or long-term value.
NEC's experience across submarine network engineering, optical transmission, cable systems and multi-country project delivery reflects the long horizon on which these systems are built. For Australia, New Zealand and the wider Pacific, NEC Australia provides local access to that global capability as organisations consider the next generation of international connectivity.
AI may be transforming what happens inside the world's data centres.
Its impact will also be felt across the infrastructure connecting them.
And much of that infrastructure will continue to run along the ocean floor.
