The dark fiber glut wasn't caused by DWDM suddenly appearing out of nowhere.

The telcos saw DWDM coming -- they funded a lot of the research that created it. The breakthrough that made DWDM possible was patented in 1991, long before the start of the dotcom mania:

  https://patents.google.com/patent/US5159601

It was a straight up bubble -- the people digging those trenches really thought we'd need all that fiber even at dozens of wavelengths per strand.

They believed it because people kept showing them hockey-stick charts.

Google bought up all that dark fiber cheap a decade later and used it as the backbone of their network.

The problem is that the laid fiber can be useful for years while data center hardware degrades and becomes obsolete fast.

It could be a massive e-waste crisis.

For the analogy to fiber & DWDM to hold, we'd need some algorithmic breakthrough that makes current GPUs much faster / more efficient at running AI models. Something that makes the existing investment in hardware unneeded, even though the projected demand is real and continues to grow. IMNSHO that's not going to happen here. The foreseeable efficiency innovations are generally around reduced precision, which almost always require newer hardware to take advantage of. Impossible to rule out brilliant innovation, but I doubt it will happen like that.

And of course we might see an economic bubble burst for other reasons. That's possible again even if the demand continues to go up.