There is glass buried under the oceans right now, and strung across this continent, that a whole generation of investors went bankrupt to put there. Tens of millions of miles of optical fiber, laid down in a frenzy at the end of the 1990s on the promise that the internet was about to swallow the world. Then the crash came. And at the bottom of it, of all that buried glass, only about two and a half percent was ever switched on. The rest sat dark in the ground, mocked as one of the great wasted fortunes in the history of capitalism.

You are using that waste right now. It is carrying my voice to you.

The man who buried a lot of it, Gary Winnick, had never run a phone company in his life. He was a bond salesman who understood something purer than how phones work: that the money was in selling the dream of the cable, not using it. He got about seven hundred and fifty million dollars out before the collapse. The bondholders got twenty cents on the dollar.

We always ask the wrong question about a thing like that. We ask was it a bubble, as if the answer told you anything. The question that actually tells you what the future will look like is different. What is it building, and who gets to keep it?

You should be suspicious of me

Here’s the trap, and I want to name it before I start, because otherwise this whole episode is a con. I’m about to tell you a string of stories where the waste turned into the future. Of course I am. Those are the only stories anyone tells. Nobody writes the history of the bubble that left a hole in the ground and nothing else. That’s survivorship bias, and it’s the reason almost everything you’ve heard about bubbles being secretly good is garbage.

So let me be honest about the base rate. Most manias leave nothing behind but lawsuits and ash. The ones that build the future are the minority, and I can’t give you the exact fraction, because anyone who quotes you a clean percentage is making it up. The title of this piece is a provocation. The claim I’ll actually defend is narrower: a specific, identifiable kind of bubble builds the future, and you can tell which kind in advance.

So here’s the test. Three questions. One: did the mania fund a network or a platform, something others can build on later, rather than a paper claim or a single object? Two, and this is the one that decides it: after the crash, can the survivors buy the wreckage for pennies and reuse it? Three: does the thing have a use beyond the speculation itself? It’s a test you can break. Find me a bubble that passed all three and built nothing, and I’m wrong.

The graveyard that became the foundation

Run that test on the winners and watch it hold.

Britain’s railway mania of the 1840s ruined a generation of clergymen and widows. George Hudson, the “Railway King,” turned out to be running a Ponzi scheme decades before Ponzi, paying old shareholders out of new capital. He died with an estate worth less than two hundred pounds. And the track stayed. The bankrupt lines were bought cheap and consolidated into the great Victorian railways. Britain lost the money and kept the railways.

The fiber is the purest case, and it’s worth being precise about it, because two things were happening at once: a stock-market mania that would vaporize, and a physical buildout that wouldn’t. The whole half-trillion-dollar build rested on one number. WorldCom told the world internet traffic was doubling every hundred days. A mathematician at AT&T measured it: it was really doubling about once a year. The company’s boss, Bernie Ebbers, a former milkman in cowboy boots, committed the largest accounting fraud in American history to that point and drove himself to prison. Two trillion dollars of market value evaporated. And then, a few years later, Google quietly bought the dark fiber for almost nothing, and the glut everyone had mocked became the backbone of search, streaming, the cloud, and eventually the machines that train AI. The bubble didn’t get the timing wrong by being stupid. It got the timing wrong, and that wrongness is exactly what pre-paid for our present. They were too early. We got to be on time, for free.

My favorite one leaves nothing you can photograph. The bicycle craze of the 1890s collapsed in an overcapacity glut. But to build millions of bicycles cheaply, the industry had to master precision ball bearings, sheet-metal stamping, steel tubing, chains, and the machine tools to make interchangeable parts at scale. Which is exactly the toolkit the automobile needed. Bike makers became car makers. Two bicycle mechanics named Wright used their chains and spoke wire to build the first airplane. And the cyclists’ lobbying for paved roads became the Federal Highway Administration. The car age inherited a workshop, and a road movement, that the bicycle had already built and abandoned. Sometimes the residue isn’t infrastructure. It’s capability.

Which bubbles lie

The test earns its keep on the failures. The South Sea Bubble and John Law’s Mississippi scheme, both in 1720, were pure paper: the thing being speculated on was the asset, so when it collapsed there was nothing on the floor to pick up. Beanie Babies left a box of toys. And 2008 is the hard case, because real houses were built, made of wood and concrete. But the signature artifact of 2008 is the “zombie subdivision”: graded lots and cul-de-sacs curving off into the desert, fifty miles from any job, with no houses. It was physical, but it wasn’t a network, and you couldn’t reuse it where it sat. Physical doesn’t mean infrastructure. That’s the whole reason there are three tests and not one.

None of this makes bubbles good. The frenzy is capitalism at its ugliest, real people are ruined, and the golden age that’s supposed to follow only arrives if the society does the hard work of adapting. A bubble can leave behind useful infrastructure and a lost decade, both at once. The leftover railway is a consolation prize paid for with other people’s ruin. It is not a reason to cheer the casino.

The one we’re in

Which brings us to the bubble we’re standing inside of. The numbers are hard to hold: the big technology companies are on track to spend something like seven hundred billion dollars in a year on data centers and chips. There is money flowing in circles in ways that should make you uneasy. The warnings, from serious people, are getting loud.

We have stood almost exactly here before. In 1929 the magic word wasn’t artificial intelligence; it was radio. The glamour stock of the age — the Nvidia of its day — was the Radio Corporation of America, up roughly two hundredfold across the decade, trading at seventy times earnings, less an investment than a religion. Then it fell ninety-eight percent, and anyone who bought at the top waited about thirty years just to break even. The paper was incinerated. But RCA the company built NBC, strung transmitters across the continent, and carried the whole apparatus forward into television. The stock was the bubble. The broadcasting industry was the buildout. The speculators were ruined, and the rest of us spent the next eighty years living inside the infrastructure their ruin paid for.

So let me take a position. I think the people calling it a bubble are basically right, and mostly missing the point. The real question is which part becomes the dark fiber, and which part is swampland sold by mail.

Run the test. The chips fail it. Graphics processors go obsolete in two or three years; the silicon is the tulip here, it depreciates to almost nothing. But I have to be fair, the way I was fair to the bicycle: this boom also leaves intangible residue, a trained generation of engineers, open models and tools, the hard-won knowledge of how to build these systems. That survives the crash too.

And then there’s the power. And here I owe you a disclosure, because it matters: I run an energy company. So when I tell you that the thing most likely to last is the power, the grid, the generation, you’re hearing a man whose entire life points him at that conclusion. Discount me accordingly. To feed these machines, Microsoft is paying to bring a reactor at Three Mile Island back from the dead, not the famous one, the undamaged unit beside it. A transmission line lasts fifty years; its value doesn’t depend on any chatbot succeeding. That is the dark fiber of our decade. But let me break my own favorite idea before you do: a lot of that power isn’t durable either. Gas turbines built for data centers that never open will strand. The requests to connect to the grid run five to ten times higher than the data centers that will actually exist. And the comforting line, that electric cars will inherit it all, is exactly the line a man in my business wants to be true. Treat it as a hope, not a promise.

So power is a durable residue, probably the most durable slice, and I’m biased toward seeing it. The honest question is still the one we started with. Who’s the Gary Winnick of this one, and which of these enormous power deals is the railway, and which is the swampland?

What we get to keep

In 1932, Samuel Insull’s electric utility empire collapsed and wiped out hundreds of thousands of shareholders who had trusted him. He was disgraced and broken. But the power plants stayed, and the grid he built on all that ruined money went on to electrify the Midwest for the rest of the century. The investors were destroyed. The electricity is still flowing.

I’ve stopped trying to decide whether that’s a tragedy or a kind of grace, because I’ve come to think it’s both, and always will be. Nobody asked the railway widows, or the fiber bondholders, whether they wanted to subsidize the generation that came after them. The future was simply taken from them by the crash and handed forward to us. That isn’t justice. It’s only how it works.

So the people pouring hundreds of billions into AI today may very well be wiped out. Many of them will be. That was never the interesting question. The question history keeps answering, in glass and steel and copper, is what the rest of us get to keep.

A solo episode, about an hour. Full transcript below the player.

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