<2>Long Before Tech CEOs Turned To Layoffs To Cover AI Expenses, There Was WorldCom
<3>By [Author Name]
In the world of technology, it’s not uncommon to see CEOs making huge speculative capital expenditures based on wild, unverified claims of future demand. However, a similar scenario played out long before the rise of AI, and it’s a cautionary tale that still resonates today.
<3>The WorldCom Debacle
In 2002, WorldCom, the second-largest long-distance company in the U.S., entered Chapter 11 bankruptcy after disclosing accounting fraud that eventually totaled $11 billion, the biggest ever at the time. CEO Bernard Ebbers was subsequently sentenced to 25 years in prison.
<3>The Internet Bubble
CNBC reported that an employee of WorldCom’s Internet service provider UUNet set off a frenzy of speculative investment and infrastructure overbuild after he used Excel to create a best-case scenario model for the Internet’s growth that suggested in the best of all possible worlds, Internet traffic would double every 100 days, a scenario that would greatly benefit WorldCom, whose lines would carry it.
<3>Consequences of the Bubble
Despite no evidence to