The infrastructure for AI and modern communication systems for drones relies heavily on one resource: fiber optic cables. Due to a shortage, prices for certain types have surged by 500%, allowing China, which controls over half of the global market for these materials, to dictate supply terms. Other countries are trying to boost their own production capabilities but are currently lagging behind.

ForkLog investigates how fiber optics have become a bottleneck in the development of artificial intelligence and another factor in the global environmental crisis.

What’s Causing the Shortage?

Technically, fiber optics consist of a three-layer thread that transmits light with minimal electromagnetic interference.

Composition:

  • Core. Ultra-pure glass with a diameter ranging from 9 to 62.5 micrometers, doped with germanium dioxide. This is the channel through which the light signal travels;
  • Cladding. A layer of pure silicon dioxide that increases the diameter of the fiber to 125 micrometers. Due to differences in refractive indices, it acts like the walls of a mirrored corridor, creating total internal reflection, preventing light from escaping the core;
  • Primary coating. An acrylic lacquer that brings the total thickness to 250 micrometers, protecting the fragile glass from moisture and micro-bends.

Glass fibers are packaged into various types of cables, from heavy armored constructions for ocean floor installation to lightweight sheaths for rooftop installations. The market consists of two fundamental classes.

Multimode Fiber

This type features a wide core (50–62.5 micrometers) that allows a laser to direct multiple light rays (modes) simultaneously. As a result of reflection off the walls, intermodal dispersion occurs, causing the rays to reach their destination at different times, affecting signal quality. The larger core simplifies splicing and allows the use of cheaper light sources instead of lasers. This is the standard for short distances, such as for connecting equipment within a traditional data center.

Single-mode Fiber

The core is narrowed to 9 micrometers. Light travels in a single directed beam with minimal distortion over hundreds of kilometers. This class is further divided based on properties that affect bend resistance:

  • G.652.D — a classic standard for trunk lines between cities. It is affordable but not very durable: when the cable is sharply bent, light begins to leak through the cladding, losing power;
  • G.657.A1 — modified fiber for urban networks and apartment buildings. It can be bent without critical signal loss. The bending radius reaches 10 mm;
  • G.657.A2 — fiber with extreme resistance to deformation and a bending radius of up to 7.5 mm. This type is critically important for dense AI cluster interconnections and drone control in electronic warfare conditions.

Many companies can wrap the finished fiber in a plastic sheath and sell it to customers, but only a few can produce the basic preforms.

To produce thousands of kilometers of fiber, a preform must be created — a massive cylinder made of ultra-pure quartz, within which the ideal proportions of core and cladding are chemically formed.

Source: Corning/Christopher Payne/Esto.

After the preform is made, it is placed in a drawing tower: at around 2000 °C, its lower end softens, forming a droplet of molten glass from which a thin continuous glass fiber is drawn. From one such cylinder, thousands of kilometers of fiber optic cable can be produced.

War as an Adversary to Intelligence

In 2026, the market faced two simultaneous sources of demand that significantly intensified pressure on supply chains. The first is data centers. The transition to AI clusters fundamentally changed network physics: a single NVIDIA NVL72 requires up to 1152 optical links for external communication with the cluster, consuming approximately 36 times more cable than a traditional server. Global demand from data centers soared to 100 million kilometers of fiber optic cable per year.

The second source of demand is military applications, where fiber optics have become a consumable resource. Amid the development of electronic warfare, drone operators have increasingly turned to wired drones. This control channel is independent of radio communication, resistant to jamming, and capable of transmitting high-quality video signals.

A field in Ukraine. Photo from open sources.

According to The Insider, in 2025 alone, Russia purchased about 60 million kilometers of optical fiber following the shutdown of a plant in Saransk. Taking advantage of their monopoly position, Chinese companies required Russian cable manufacturers to pay 100% upfront and raised the prices of G.652.D standard models by 2.5 times — from 16 yuan at the beginning of 2025 to 40 yuan by early 2026.

The price includes logistics errors, operational losses, urgent purchases, and attempts to build stockpiles in anticipation of further price increases.

The demand was also exacerbated by the conflict in the Middle East: in 2026, the radical Shiite group Hezbollah utilized fiber optic drones to bypass the active protection systems of Israeli tanks.

The market paradox is that a 100-core trunk cable for data centers and a thin fiber for FPV drones are made from the same scarce raw material — quartz preforms. The two sectors consumed about a third of the global fiber supply at the peak of the shortage, which undoubtedly affected prices. According to the most conservative estimates from manufacturers, in the first quarter of 2026, the price of G.657.A2 rose by more than 500%, from $5 to $33 per kilometer.

The consequences of this race are evident not only in procurement prices. In conflict zones, the use of wired drones has led to an environmental disaster: hectares of farmland are littered with fiber optic threads. Cables can become traps for animals and birds, and the polymer coatings eventually break down into microplastics, which degrade in the soil over 200 to 600 years.

A bird's nest with fiber optic elements from a drone in a conflict zone. Photo: Telegram channel of the Ukrainian Armed Forces Brigade.

Beijing's Monopoly

The AI boom has accelerated the construction of data centers, but fiber optic production has not kept pace: from laying the foundation of a factory to the first commercial shipment takes three to five years.

Moreover, the optical preform market is a closed club. According to Industry Research, 62% to 70% of global production is controlled by the Asia-Pacific region. China accounts for a significant portion of mass production, focusing on low-cost products for basic internet, while Japan is one of the main suppliers of advanced technologies.

North America holds about 21% of the market, while Europe has a modest 14%. Nearly three-quarters of global output is concentrated in the hands of just a handful of megacorporations.

Source: Marketsandmarkets.

Within this monopoly, the spheres of influence are divided by methods of fiber optic production at the patent level:

  • OVD — 48% of the market. Corning remains a key player in this segment. It is an ideal high-performance conveyor for mass production of classic trunk fiber;
  • VAD — 37% of the market. This is the technological stronghold of Japanese giants like Sumitomo and Shin-Etsu. This method is more complex but ensures high purity and low losses. Japanese technology is what allows for the creation of ultra-flexible special fiber preforms like G.657.A2;
  • MCVD/PCVD — 15% of the market. Specific technologies used by European and Asian manufacturers mainly for niche tasks and complex fibers.

According to the analytical agency SNS Insider, the optical preform market was valued at $8.5 billion in 2025 and is projected to reach $37.5 billion by 2033. From 2026 to 2033, experts expect a compound annual growth rate (CAGR) of 20.39%.

Source: SNS Insider.

While the U.S. focused on limiting China's access to semiconductors, another dependency remained less visible: China has subsidized its three giants (YOFC, FiberHome, Hengtong) for decades.

The scenario with chips has repeated itself: in an effort to save by outsourcing production, the U.S. has fallen into a trap. When neural networks required millions of kilometers of optical connections, the shortage quickly became a convenient pricing lever for Beijing.

The U.S. response was large-scale but delayed. In January 2026, Meta signed a long-term contract with Corning for fiber optic supply worth $6 billion. In May, Nvidia invested $500 million in the company's securities as part of a partnership aimed at increasing Corning's production capacity in the U.S. tenfold. The nuance is that these volumes will only materialize by the end of the decade. Until then, there are no alternatives to China, and big tech companies remain hostages to the shortage, buying fiber optics at any price.

Chain Reaction

In this battle of giants, the Global South silently capitulates. Africa is experiencing the crisis most acutely, where internet accessibility is already critically low. In 2019, the World Bank reported that only one-third of the population had access to broadband internet. It estimates that about 45% of Africa's residents live more than 10 km away from the nearest trunk fiber optic network.

In such conditions, the underwater cable system of the 2Africa project by Meta, aimed at connecting coastal African countries with Europe and Asia, faced a force majeure in the Persian Gulf: the contractor Alcatel Submarine Networks suspended work in the region.

Additionally, the AI boom has heightened dependence on vulnerable underwater cables, which carry over 95% of intercontinental traffic. This was evidenced in 2024 by incidents in the Baltic Sea involving the simultaneous breakage of the BCS East-West Interlink and C-Lion1 cables, as well as the failure of wiring in the Red Sea.

The industry is trying to find workarounds. Starlink addresses the "last mile" problem by providing connectivity to remote areas, but satellites cannot replace high-conductivity underwater cables or GPU cluster architecture. Fiber optics remain the only option where maximum speed is required.

It is likely that the 6G standard could alleviate production pressure. However, if this happens, it will not be before the next decade.

While the U.S. and Europe are ramping up new production capacities, China is gaining an advantage. Just like with the chip shortage, a sharp drop in prices is not expected in the next three to four years. Hyper-scalers, military agencies, and providers are competing for the resource. Those who secured contracts early or have their own production will win.

Infrastructure "black swans" rarely appear dangerous at the outset. A shortage of transformers, power grid limitations, and growing local discontent have long seemed manageable issues for the industry, but ultimately turned into systemic constraints and sources of competitive advantage for certain players. Fiber optics seem poised to become the next factor of this kind.