The telecommunications industry is undergoing a rapid transformation fueled by artificial intelligence, moving beyond simply transmitting data to delivering “intelligence across local and regulated infrastructure,” according to a new report from NVIDIA. The fourth annual “State of AI in Telecommunications” survey reveals that AI is not just a future prospect, but a current driver of revenue, cost reduction, and operational efficiency for telcos globally.
The survey, conducted from September to November 2025 with 1,038 respondents – a mix of management and AI practitioners across various industry segments – paints a picture of widespread AI adoption. A striking 90% of respondents reported that AI is helping to increase annual revenue and drive down costs. This tangible impact is prompting a significant increase in AI investment, with 89% of telcos planning to boost their AI spending in 2026, a substantial jump from 65% the previous year.
One key trend highlighted in the report is the shift towards AI-native networks. 77% of respondents anticipate the launch of these networks *before* the deployment of 6G, signaling a proactive approach to integrating AI directly into the core network architecture. This isn’t simply about incremental improvements. it’s about building fundamentally new systems capable of self-configuration, self-healing, and self-optimization with minimal human intervention.
Network automation is currently the leading use case for AI investment, surpassing even customer experience improvements. 65% of telecom operators report that network automation is being driven by AI, with autonomous networks delivering immediate ROI by eliminating manual effort in areas like energy management, fault prediction, and capacity planning. As Sebastian Barros, managing director of Circles, a Singapore-based telecommunications provider, puts it, “Autonomous networks deliver immediate ROI by eliminating human effort from repetitive, reactive workflows.”
Generative AI is also gaining traction, with 60% of organizations either using or assessing its potential, up from 49% in 2024. However, the report suggests that the real structural ROI will come from “agentic AI” – systems capable of coordinating decisions across multiple domains in real-time. Chetan Sharma, CEO of Chetan Sharma Consulting, explains, “Agentic AI accelerates [autonomous networks] by coordinating decisions across domains in real time.”
The importance of open-source models and software to AI strategy is also significant, with 89% of respondents identifying it as a key component. This suggests a preference for flexibility and collaboration over vendor lock-in, allowing telcos to tailor AI solutions to their specific needs.
Beyond network infrastructure, AI is also driving productivity gains across the board. Nearly all respondents reported that AI is boosting employee productivity, with 26% citing major or significant improvements in task completion speed and quality. These gains are being realized through the deployment of both generative and agentic AI solutions in areas ranging from back-office operations to network management.
The top three areas for return on investment (ROI) from AI are currently focused on core network functions: AI for autonomous networks (50%), improved customer service (41%), and internal process optimization (33%). This prioritization reflects a strategic focus on maximizing efficiency and reducing operational costs.
The surge in edge computing investment is also reshaping telecom network architectures, bringing AI inferencing closer to end-users. Telcos are increasing investments in AI-native RAN (Radio Access Network) and 6G, anticipating a faster deployment cycle for the next generation of wireless technology. The primary drivers for this investment are enhancing spectral efficiency, improving the performance of edge AI applications, and accelerating 6G research and development.
The industry is clearly moving towards a new paradigm, one where communication service providers are evolving into “AICO” – AI infrastructure companies operating at network proximity. This transition, as Barros describes, represents a fundamental shift in the role of telcos in society, moving beyond simply moving bits to moving intelligence.
The report underscores that AI is no longer a speculative technology for the telecom industry; it’s a critical component of their present and future success. The increasing investment, coupled with the tangible ROI already being realized, suggests that this trend will only accelerate in the coming years.
The full “State of AI in Telecommunications 2026 Trends” report is available for download from NVIDIA’s website.
