The fiber-optic overbuild (1996-2001)
Telecom companies like WorldCom and Global Crossing borrowed heavily to build fiber-optic networks, betting on explosive internet demand. When demand lagged, many went bankrupt and the sector shed trillions in value.
Massive bankruptcies and consolidation in the telecom sector.
A cautionary tale about debt-funded infrastructure bets ahead of proven demand.
ByteDance's debt-funded AI buildout echoes the pattern of borrowing to build infrastructure before demand is proven, though ByteDance's existing profit base is a key difference.
