[throw310822]

But this is also an insurance against the threat of an overcapacity-induced bubble: whatever capacity is built, it won't last more than a few years before becoming obsolete anyway. There's no risk that once we've finished building the railroads, or the network links, these will be "more than enough" for at least a decade.

[throwawayffffas]

I think the implication is the opposite, the overcapacity in case of railroads and network links became the substrate that allowed the returns after the bubble. i.e. We are still using a lot of fiber that was laid down in the 2000s and a lot of rail laid down in the early 20th century.

This time around the investments are going to evaporate and we won't get to reap the benefits of very large amounts of compute.

The possible inheritance we might get might be increased fabrication capacity for state of the art silicon.

[throw310822]

From a societal point of view yes, it's certainly better to have already built infrastructure that might be used tomorrow than to burn money in capacity that is obsolete before ever becoming useful. From an investor's point of view though, the existence of available, completely unused capacity is disastrous because it means that prices and investments will remain close to zero until all that capacity is used. For the most obvious example: if you're investing in Nvidia, the scenario where data centers remain full of perfectly viable but completely unused GPUs for a decade is much worse than the scenario in which those GPUs were unused but you still have to build a good amount again within a few years. In the first case Nvidia has absolutely nothing to build and your shares go to zero; in the second case the company takes a hit but they keep selling new products.