Gary Smith has been Ciena CEO since May 2001, and led the company through the telecom crash that followed the fibre boom. He says today’s AI build-out is a different kind of cycle, the optical networking company’s chief executive told Steven Rosenbush of The Wall Street Journal.
“Having lived through the pain of that, I’m suitably paranoid around all of this, right? As you’d expect,” Smith told the Journal.
He said the differences between the two booms outweigh the similarities. The AI era will produce losing bets, he said, but it should be judged on its own terms.
From a $40bn peak to a 90% fall
Ciena went public in the late 1990s in an IPO that valued it at $3.4bn, according to the Journal. Its market value later passed $40bn, then fell by more than 90% in the bust. It is now worth about $45.75bn.
Smith, 66, described AI demand as a series of waves. The first, linking data centres to each other, is still ramping up. Inference, where businesses put trained models to work, is just starting. AI agents come next, and then robotics, he said.
“People have grossly underestimated the amount of infrastructure that’s going to be required,” Smith said.
Ciena has built 3-nanometre versions of its WaveLogic chips that send 1.6 terabits per second over a single strand of fibre. A 2-nanometre version is in development.
“No dark GPUs”
About 94% of the fibre laid in the telecom boom went unused, Citi’s Heath Terry told the Journal in an earlier interview.
“There are no dark GPUs,” Terry said.
Smith pointed to another difference. Today’s buyers include highly profitable cloud giants, he said.
“Today, we haven’t been able to keep up with demand,” Smith said.
Ciena expects compound annual growth of 30% from fiscal 2026 to 2029, according to the Journal. It expects to end fiscal 2026 with an order backlog of about $10bn.
Other recent views on AI spending differ. Apollo’s Torsten Slok said on Monday that US companies outside tech now treat AI spending as a cost. Gartner has warned of AI infrastructure write-downs. Nvidia has put $170bn behind neoclouds.