A “fiber glut” might sound like a phrase uttered by a wellness influencer extolling the virtues of ancient grains. In reality, it’s the name for an early 2000s phenomenon that drove some of the world’s fastest-growing companies into the ground. Amid the pre-Y2K dot-com boom, corporations, industry analysts, and even the U.S. Department of Commerce began to circulate a shocking statistic: that the internet doubled in size every one hundred days, implying an annual growth rate of 1,000 percent. Millions of miles of fiber-optic cables were buried below streets and oceans in the late 1990s to keep up with supposedly exponential demand that never materialized. By 2002, just 2.7 percent of the fiber installed in the preceding few years was being used.

Companies that drove the fiber glut were saddled with financial ruin and accounting scandals. “The actual traffic growth was never close to 1,000% per year,” Vint Cerf, senior vice president at the fiber optics firm WorldCom, admitted to The Wall Street Journal. “But I don’t think it was an attempt to misstate anything—it was an honest characterization of what kind of demand we were seeing from these companies.”

Today, a new generation of tech executives are making similarly audacious claims about demand for their products, justifying yet another infrastructure-building binge. The industry this time is artificial intelligence. OpenAI founder Sam Altman has been pitching everyone from the Biden administration to the United Arab Emirates for help in building out a fleet of data centers that would each require five gigawatts of electricity, about a thousand times more than the average data center. OpenAI’s vice president of global affairs—Clinton administration alum Chris Lehane—recently predicted that the U.S. would need to invest $175 billion in AI infrastructure: funds, he contends, that will “reindustrialize the country” and “revitalize the American Dream.” Banks and consultancies have bolstered those claims. Goldman Sachs, for instance, projects that data centers will require an additional 47 GW of........

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