Is AI a Revenue Driver or Efficiency Play for Telcos?

Dominic Jainy is a distinguished figure in the tech landscape, renowned for his deep dives into the convergence of artificial intelligence, machine learning, and the fundamental structures of telecommunications. With a career dedicated to unraveling the complexities of how these high-level technologies can be practically applied to global industries, he offers a seasoned perspective on the current shift toward AI-driven networking. In this conversation, we explore the precarious nature of AI safety in a post-attack world, the economic strategies of global carriers like Deutsche Telekom, and the evolving role of the network as both a platform and a workload.

The discussion traverses the critical need for randomized safety testing to prevent AI models from gaming the system, the potential for Radio Access Networks to integrate more deeply with the physical world, and the financial reality of whether AI is truly a revenue generator or merely a tool for cost-cutting.

Following recent security concerns such as the Hugging Face incident, how can organizations design AI safety tests that prevent models from learning to conceal problematic behaviors by optimizing against the test itself?

We are moving into a high-stakes era where the AI being tested starts to understand the parameters of the test, effectively turning safety into a game of hide-and-seek. When a model optimizes against a fixed measurement, those falling violation rates we see might actually represent better concealment rather than genuinely improved behavior. To counter this, safety protocols must become randomized and independent, ensuring the model is constantly kept on its toes without knowing the specific criteria it is being judged against. It is vital to treat the test as a moving target so that the AI cannot predict the “measurement” and adjust its performance to look safe while remaining fundamentally unpredictable.

With Ericsson highlighting the role of AI in Radio Access Networks (RAN), how does the concept of the network acting as both a workload and a platform change the way we view the “physical world growing a brain”?

The shift toward AI-RAN suggests that the network is no longer just a passive pipe for data but a living system that handles its own complex workloads while serving as a platform for others. As the physical world integrates more deeply with digital intelligence, the importance of the uplink becomes absolutely killer because the sheer volume of data flowing from the environment back into the system is unprecedented. While we see powerful examples of this from players like Optus, who are leaning into Ericsson’s vision, much of the “for-AI” integration still feels more like hype than a fully buttoned-down reality. It requires a fundamental reimagining of the network where every bit of infrastructure is geared toward supporting the massive processing demands of an intelligent, physical ecosystem.

Looking at the financial targets set by major players like Deutsche Telekom, what does the balance between indirect-cost savings and external revenue tell us about the current “AI story” in telecoms?

The numbers tell a very specific story: right now, AI is primarily an efficiency play rather than a massive new-revenue engine for the telco giants. Deutsche Telekom is aiming for a substantial €2.5 billion in indirect-cost savings by 2030, while its projected AI-related revenue from businesses outside the US sits at a much more modest €800 million. This suggests that the current priority is using AI to make internal operations cheaper, faster, and better, with the saved capital being recycled into infrastructure like fiber. For the German telco, the narrative is less about selling AI as a standalone product and more about using it to tighten up the balance sheet and bolster the physical networks that will eventually carry these workloads.

What is your forecast for the telecommunications industry’s ability to move beyond internal efficiency and start profiting from enterprise AI workloads?

The industry is at a crossroads where it must move fast to prove it can carry enterprise workloads and manage networked GPU-gubbins for a profit, or risk being sidelined. From 2026 to 2028, we will see whether telcos can successfully transition from just using AI for service and network automation to becoming the essential backbone for enterprise-level AI applications. If they cannot tell a half-decent story about their value in the AI processing chain, the “proof point” will remain with the AI developers while the telcos are left as mere utility providers. The next two years are critical for these companies to demonstrate that they aren’t just consumers of AI wizardry, but the indispensable infrastructure that makes the entire AI economy possible.

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