Lumen Technologies CEO Kate Johnson discussed the company’s strategic partnerships, particularly with Google Cloud, to enhance network capabilities for supporting the growth of artificial intelligence (AI), highlighting a significant increase in deal flow and free cash flow guidance. She outlined the phases of AI adoption and emphasized Lumen’s commitment to adapting its services to meet the evolving demands of both tech giants and enterprises, while also preparing for potential political impacts on operations.
In a recent interview, Lumen Technologies CEO Kate Johnson discussed the company’s performance and strategic direction following their earnings report, which highlighted an increase in free cash flow guidance. Johnson emphasized that major tech companies are choosing Lumen to build a “trusted network” to support the growth of artificial intelligence (AI). She noted that traditional networks are inadequate for the demands of AI, and Lumen is addressing these challenges by enhancing speed, capacity, and security.
Johnson announced a significant partnership with Google Cloud, which is part of a broader trend where all three major cloud providers are collaborating with Lumen. This partnership is expected to generate substantial business, with Lumen securing $8.5 billion in deals over the past two earnings cycles. These collaborations are aimed at expanding network capabilities to support the AI ambitions of these tech giants.
Since the last earnings report, Lumen has seen over $3 billion in new deal flow, which is crucial for funding the company’s transformation. Johnson explained that the initial deals provide liquidity for the company’s ongoing changes, while subsequent agreements will help reduce debt. Lumen is focused on redefining networking not only for hyper-scalers but also for enterprises, emphasizing the need for easy, quick, and secure network services.
The conversation also touched on the phases of AI adoption. Johnson outlined three phases: the first involves major software companies and hyper-scalers building and training AI models, which has led to increased demand for Lumen’s network services. The second phase is characterized by enterprises beginning to utilize these AI models and recognizing the need to upgrade their networks. Johnson anticipates a third phase where AI systems will communicate with each other, leading to a significant increase in data volume.
Finally, Johnson addressed the potential impact of election outcomes on Lumen’s operations. She stated that the company is prepared for any political changes, considering factors like tariffs, taxes, and regulations. Regardless of the election results, Johnson believes that the secular growth story of AI will remain relevant, and Lumen is committed to maintaining agility and responsiveness in a rapidly evolving market.
