To The Moon

Telecom equipment giant Ericsson $LM Ericsson Telephone(ERIC)$  surged 20% after its earnings call — mainly due to cost optimization efforts rather than industry-wide growth. However, during the call, management clearly emphasized that Edge AI will be a key driver of future network investments.

An analyst asked whether this trend was already being observed in current discussions with telecom operators — and whether actions were already being taken — or if it was something expected to unfold in the coming years.

The company’s response was particularly insightful and offers a good window into how frontline network operators currently view the market.

Ericsson explained that most AI investments today are still focused on data centers, primarily for model development and training. But the market is gradually shifting toward inference applications, which are more sensitive to latency. As a result, computing is expected to move closer to the edge.

While no major operator has yet made large-scale investments in this area, Ericsson has already observed applications emerging that require edge computing and edge AI.

For example, while the ecosystem today still revolves around smartphones, future devices like AI-powered glasses will demand ultra-low latency to be truly practical. As these trends take shape, new device categories are beginning to appear — and they will need networks with new capabilities.

The CEO expressed strong optimism about this transition, believing it will inevitably materialize — though not in the next quarter or the first half of next year. The investment wave in large data centers will continue for now, but as AI applications spread, the demand for edge computing will become increasingly clear.

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