Good morning. Verizon sees AI not just as a tool to boost efficiency but as a potential new revenue engine.
I recently spoke with Verizon CFO Tony Skiadas, who discussed how the company is working to repurpose parts of its wireline network to support AI workloads and what that could mean for Verizon’s future.
Reimagining wireline for AI
Skiadas explained that Verizon (No. 30 on the Fortune 500) is testing ways to leverage its existing central offices—facilities largely freed up as copper networks are replaced by fiber—for AI processing power at the edge.
“Fiber takes up a fraction of the space compared with the old copper network,” Skiadas told me. That frees up facilities equipped with space, power, and cooling—exactly what’s needed to handle AI workloads at scale, he said.
The initiative, internally called Verizon AI Connect, centers on repurposing those assets rather than selling them. According to Skiadas, the combination of facilities and fiber positions Verizon to serve hyperscalers—large tech companies requiring custom AI infrastructure—with unique value. The company might have to spend some capital on its facilities, but it already has many of the assets in place to deliver these workloads at scale, he said.
“This is probably a medium- to long-term exercise,” he noted, “because every deal is highly customized.” Skiadas added: “But I like what I’m seeing from a sales funnel perspective. We talked about a billion-dollar sales funnel at the beginning of the year, and that’s actually doubled in terms of potential opportunity.”
While some smaller agreements could materialize this year, larger deals will take more time due to the complexity of building fiber or upgrading facilities, Skiadas explained. “It’s not a flip-the-switch thing,” he said. But the current level of demand is encouraging and will help guide where the company invests, he added.
AI inside Verizon
Beyond customer offerings, Verizon also is using AI internally to improve efficiency and service, Skiadas said. He pointed to AI-driven personalization in its customer plans, tools that help support agents find answers faster, and network optimization powered by machine learning.
AI is making Verizon’s customer care both more efficient and more effective, he said. “The customer is not waiting for 10 or 15 minutes for an answer.” Verizon is also applying AI in its network and across back-office functions to improve forecasting, accuracy, and decision-making, he added.
“I’m pushing my own team on this, too, to continue to innovate,” Skiadas said. “I even use it myself for simple things.” For example, he uses it to digest reports and summarize documents. “It’s a time saver for me,” he said. “And I tell people, if I can use it, anybody can. So that’s my motivation to my team.”
Regarding ROI of AI: “I think it’s going to take time,” Skiadas said. Some benefits, like productivity gains in customer care, are easy to quantify, while others—such as efficiency improvements in finance or better decision making—are harder to measure directly. The true measure, he emphasized, is how effectively Verizon employees can make forward-looking decisions. Ultimately, Skiadas sees the value of AI less in looking backward and more in improving forecast accuracy, guiding decisions, and enabling employees to focus on higher-value work.
I asked Skiadas what he thinks makes Verizon stand out among its competitors. Over the past seven years, Verizon has invested about $200 billion in wireless spectrum and networks—spending roughly $17–18 billion annually—to continually strengthen its network, Skiadas said.
“That’s really the hallmark of our company, and then giving customers choice and flexibility,” he said.
Raja Dakkuri, EVP and CFO of Cohen & Steers, Inc. (NYSE: CNS), has decided to resign from the company effective Oct. 17 after accepting another opportunity. Cohen & Steers has appointed Michael Donohue, SVP and controller, as interim CFO. The company has begun a search, considering both internal and external candidates, to find a permanent successor.
Hashim Ahmed has been appointed CFO of New Found Gold Corp. (NYSE-A: NFGC), effective immediately. Current CFO Michael Kanevsky will assist with the transition. Ahmed brings 25 years of experience, most recently serving as EVP and CFO at Mandalay Resources Corp. prior to its acquisition by Alkane Resources Ltd. He has also held CFO roles at Nova Royalty Corp. and Jaguar Mining Inc., and spent seven years at Barrick Gold Corp.
Big Deal
U.S. corporate bankruptcies climbed for a fourth straight month in August, according to S&P Global Market Intelligence data. Filings by large public and private companies rose to 76 from 71 in July. Year-to-date, 524 companies have filed through August, the most for the period since 2010. The data includes companies with public debt and assets or liabilities of at least $2 million or private companies with assets or liabilities of at least $10 million at the time of filing.
U.S. corporations reduced debt in the second quarter, according to S&P Global Market Intelligence, and could see further relief in the months ahead as the Federal Reserve is expected to resume cutting interest rates. “However, the impact from these cuts may be limited if yields for mid-dated and long-dated Treasurys do not decline alongside the Fed’s easing monetary policy,” the report states.
Courtesy of S&P Global Market Intelligence
Going deeper
“Trump wants to end a half-century-old mandate on how companies report earnings” is a Fortune report by Nino Paoli.
From the report: “In a Truth Social post on Monday, President Trump said companies should instead only be required to post earnings every six months, pending the U.S. Securities and Exchange Commission’s approval. This change would break a quarterly reporting mandate that’s been in place since 1970. ‘This will save money, and allow managers to focus on properly running their companies,’ Trump wrote. He added that China has a ’50 to 100 year view on management of a company,’ as opposed to U.S. companies required to report four times in a fiscal year. China’s Hong Kong Stock Exchange allows companies to submit voluntary quarterly financial disclosures, but only requires them to report their financial results twice a year.”
Overheard
“A well-designed digital identity system doesn’t just verify that you are who you say you are. It also protects your ability to limit what you reveal.”
—Will Wilkinson, director of government affairs for identity provider Persona, writes in a Fortune opinion piece titled, “America needs a digital identity strategy.”
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If Rivian’s sales are any indication, owning an electric vehicle isn’t such a partisan issue, despite President Donald Trump’s rollbacks of mandates, incentives, and targets for EVs.
At the Fortune Brainstorm AI conference in San Francisco on Tuesday, Rivian CEO RJ Scaringe said it’s a misconception that electrification is politicized, explaining that most customers buy a product based on how it fits their needs, not their ideology. The questions car buyers ask, he said, are the same whether they’re purchasing one with an internal-combustion engine or a battery: “Is it exciting? Are you attracted to the product? Does it draw you in? Does the brand positioning resonate with you? Do the features answer needs that you have?”
Buyers of Rivian’s R1 electric SUV are split roughly 50-50 between Republicans and Democrats, Scaringe told Fortune’s Andrew Nusca. “I think that’s extraordinarily powerful news for us to recognize—that this isn’t just left-leaning buyers,” he added. “These are people that are saying, ‘I like the idea of this product, I’m excited about it.’ And this is thousands and thousands of customers. This is statistically relevant information.”
Buying an EV was once an indication of left-leaning politics, but the politics got scrambled after Tesla CEO Elon Musk became the top Republican donor and a close adviser to Trump. That drew some new customers to Tesla, and turned off a lot of progressive EV buyers, with many existing owners putting bumper stickers on their Teslas explaining that they bought their cars before Musk’s hard-right turn. Trump and Musk later had a stunning public feud, in part over the administration’s elimination of EV and solar tax credits.
But Scaringe said he started Rivian with a long-term view, independent of any policy framework or political trends. He also insisted that if Americans have more EV choices, sales would follow. Right now, Tesla dominates a key corner of the market, namely EVs in the $50,000 price range. Rivian’s forthcoming R2 mid-size SUV will represent a new choice in that market, with a starting price of $45,000 versus the R1’s $70,000.
Ten years from now, Scaringe said he hopes—and believes—that EV adoption in the U.S. will be meaningfully higher than it is today across the board, explaining that the main constraint isn’t on the demand side. Instead, it’s on the supply side, which suffers from “a shocking lack of choice,” especially compared to Europe and China, he added. EV options in the U.S. are limited by the fact that Chinese brands are shut out of the market.
More choices for U.S. EV buyers would presumably create more competition for Rivian—and indeed, the flood of low-priced Chinese EVs in other auto markets has created a backlash, with countries such as Canada imposing steep tariffs on them. But Scaringe appears to view more competition as positive for the market overall.
“I do think that the existence of choice will help drive more penetration, and it actually creates a unique opportunity in the United States,” he said.
Federal Reserve Chair Jerome Powell on Wednesday described the U.S. economy as “very unusual,” saying policymakers are navigating a rare combination of tariff-driven goods inflation and a labor market that may already be weaker than official data suggests.
The Fed cut interest rates for the third consecutive meeting, a quarter-point reduction Powell framed not as a confident pivot toward easier policy, but as a defensive move meant to keep the labor market from slipping further. He repeatedly emphasized risks to employment have risen “in recent months,” and noted that behind the headline numbers, job creation may already be negative.
Powell made the striking admission the Fed believes the official payroll figures—which have slowed sharply since the summer—are overstating job growth by roughly 60,000 per month.
“Forty thousand jobs could be negative 20,” he said, adding this dynamic is not well understood by the public because unemployment claims remain historically low—something both economists Mark Zandi and Claudia Sahm recently toldFortune could be giving people a false sense of security about the job market.
“I think a world where job creation is negative… we need to watch that very carefully,” Powell said.
It is this weakening backdrop Powell said makes the current moment “very unusual”: Inflation remains elevated, but most of the remaining overshoot comes from goods categories directly affected by tariffs, as opposed to domestic economic overheating, which he said the Fed has worked hard to cool since its 2022 highs; inflation excluding tariff-affected goods is “in the low [two percent],” he said. Services inflation is cooling, wage pressures are easing, and neither the labor market nor business surveys suggest a “Phillips-curve” kind of inflation threat, Powell said, referring to the inverse relationship between inflation and unemployment.
Instead, Powell said, the bulk of the problem is a “one-time price increase” pushing up goods categories as import levies work their way through supply chains. Goods inflation, he noted, should peak around the first quarter of 2026, assuming no additional tariff rounds.
Those crosscurrents have fractured the Fed. Three officials formally dissented from the rate cut on Wednesday, and several others offered what Powell described as “soft dissents,” when an official’s personal projection falls out of what they ultimately voted for. There were six such “soft dissents” this time, during one of the deepest divides inside the FOMC in years, driven by disagreement over how to weigh the risks of lingering inflation against the possibility that job growth is weaker—and much more fragile—than reported.
Powell stressed that policymakers cannot simply choose one mandate to prioritize.
“There is no risk-free path,” he said, a refrain he’s repeated for months. “When both sides of the mandate are threatened, you should be kind of neutral.”
He characterized the current stance as being at the “high end” of neutral, allowing the Fed to “wait and see” how the data evolve.
Federal Reserve Chair Jerome Powell warned Wednesday afternoon that the U.S. labor market may be significantly weaker than the official data suggest. But according to KPMG chief economist Diane Swonk, the Fed may be drawing the wrong conclusion—and in doing so, risks undermining its hard-won credibility on fighting inflation.
In a new analysis shared with Fortune, Swonk argues that Powell is treating the slowdown in hiring as a sign of weakening demand that must be offset with lower interest rates. But if that weakness is being driven instead by structural forces—specifically, AI adoption and sharp declines in immigration—then cutting rates won’t fix the underlying problem and could worsen inflation.
“Powell risks the Fed’s inflation-fighting credibility if the weakness in employment is due more to AI and curbs in immigration than weak demand,” Swonk wrote.
That warning comes after one of the most contentious Federal Open Market Committee meetings in years. The Fed cut rates by a quarter point for the third meeting in a row, taking the federal funds rate down to 3.5%–3.75%, but the vote fractured the committee. Swonk notes it was the first time since 2019 that there were three dissents, and they came “in opposite directions.”
Governor Stephen Miran — currently on leave from the White House Council of Economic Advisers — voted for a half-point cut, while Kansas City Fed President Jeff Schmid and Chicago Fed President Austan Goolsbee voted to hold rates steady.
Swonk highlights that the Fed’s statement resurrected language meant to indicate a pause: “In considering the extent and timing of additional adjustments… the Committee will carefully assess incoming data, the evolving outlook and the balance of risks.” Powell reinforced that stance, saying “We are well positioned to see how the economy evolves” and emphasizing that policymakers would need to “be a bit skeptical” of data distorted by the government shutdown.
But the bigger issue, Swonk argues, is that Powell kept pointing to imminent downward revisions to employment, revisions she warns may not mean what the Fed thinks they do.
If job growth is negative because automation is replacing workers or because the labor force is shrinking due to immigration policy, then monetary policy can’t solve the problem. That’s because rate cuts can stimulate demand, but they cannot create workers or reverse automation decisions already made by firms.
“The challenge is if that weakness is due to AI and curbs on immigration, then rate cuts will not do much to shore up the labor market. More could show up in inflation,” she wrote.
Powell, during the conference, acknowledged that AI may be “part of the story” behind the cooling labor market, citing major employers like Amazon that have linked hiring freezes and job cuts to automation. But he stressed that it’s “not a big part of the story yet,” and said it’s too early to know whether this wave of technological change will ultimately destroy more jobs than it creates.
He also noted that labor supply has “come down quite sharply” due to a drop in immigration and participation.
A misread could become especially dangerous given the fiscal backdrop. Swonk notes that “expansions to tax cuts last year will show up as a record high tax refunds in early 2026,” warning that the windfall could “further entrench inflation much like we saw in the wake of the pandemic.”
At the same time, federal debt is projected to surpass GDP for the first time since World War II, marking a level of issuance that is “a lot of debt for bond markets to absorb.”
Swonk also flags mounting risks to credibility inside the Fed itself.
Six participants wanted to hold rates steady, and the market openly dismissed Powell’s attempt at a hawkish spin: investors “priced in more cuts after the meeting,” she notes. Powell now appears to be one of the more dovish voices on the committee, raising questions about the direction of policy if the administration installs a new chair aligned with Miran’s more aggressive easing stance.
Swonk expects the Fed to pause early next year, but warns that if inflation fails to cool as expected, “the bond market could grow more skittish about rate cuts.”
Politics8 years ago