Michael Dell, founder, chairman and CEO of Dell Technologies (NYSE:DELL), said the company sees artificial intelligence as a major inflection in computing demand, with Dell’s AI server business expanding rapidly and a broad customer base still early in adoption. Speaking on Bank of America’s “View from the Top” CEO call series with senior equity research analyst Wamsi Mohan, Dell described AI as a shift “from calculating and computing to thinking and intelligence,” and argued that the scale of the global economy means even modest productivity gains could justify significant investment.
AI revenue growth and demand signals
Dell said its AI server business has scaled quickly, describing an expansion “from $2 billion to $10 billion to $25 billion,” with an expectation of “$50 billion this year.” Dell added that more than 4,000 customers are using what it called “AI factories,” and said it believes the industry remains in the “steep part of the S-curve” for adoption.
Supply chain constraints, memory dynamics, and pricing
On supply chain tightness across AI infrastructure—ranging from labor and cooling to semiconductors—Dell argued that volatility can play to Dell’s strengths. “We kind of love it when there’s a supply chain challenge,” he said, calling it “the Super Bowl for us,” and pointing to the company’s long-standing supplier relationships and scale.
Dell offered a detailed view of memory pressures, describing what he called a “25 × 25” dynamic: increasing high-bandwidth memory per accelerator alongside a rising number of accelerators. He noted the step-up from 80 GB on Nvidia’s H100 to 288 GB on current parts, and said future parts could reach “1 TB” and “2 TB,” implying a large increase in aggregate memory demand. He said it can take about four years to build a new memory plant, and argued the industry’s weak 2023 conditions left suppliers cautious about investing.
On Dell’s ability to navigate margin pressure from component inflation, Dell said the company is adjusting pricing quickly. “We’re raising prices to protect gross margins,” he said, adding that Dell is “very agile in doing that.” He also said availability can matter more than cost for customers: “It would be bad if the price of memory went up, but it’d be worse if you couldn’t get any.”
Dell acknowledged uncertainty around customer behavior amid price increases, saying there is “some pull forward” but also potential delays from customers waiting for prices to normalize. However, he framed much of the demand as deferred rather than eliminated, noting that roughly “500 million” of the world’s “1.5 billion PCs” are four years old or older. He also said Dell’s installed base skew remains older in servers, stating that “the majority of our installed base of servers are 14G or older,” compared with Dell’s current “17G,” and cited a “7-to-1 consolidation benefit.”
Competitive positioning in AI infrastructure
Dell attributed its AI infrastructure momentum to repeat orders, engineering execution, and deployment capabilities. He cited Dell’s work across compute, storage, and networking, referencing offerings including the “Lightning File System,” “PowerScale,” and “ObjectScale.” Dell emphasized the importance of on-site installation, saying Dell deploys systems with “an army of people” and “we get paid for that.”
He also argued that reliably operationalizing complex systems is a key differentiator, including what he described as Dell’s ability to deliver and stand up “hundreds of these racks in a given week like clockwork” and have them running “within 24 or 36 hours.” Dell added that industry “reference designs” can contain issues, saying, “They don’t actually work. There’s a lot of bugs in them,” and contended Dell’s engineering discipline improves reliability for customers.
On the role of ODMs and hyperscalers, Dell said hyperscalers can build large internal engineering teams and work directly with ODMs, but argued many other customers cannot. He said Dell still has “some business with the hyperscalers,” though it is “not our main priority.” He also noted receiving “panic phone calls” from some customers and said Dell is advantaged in enterprise.
Sovereign AI demand and geopolitics
Dell said geopolitical tensions are contributing to demand for “sovereign AI,” as countries seek to run AI capabilities inside their borders using private data. He said Dell has “extensive factories in Europe” and referenced partnerships “like with Palantir” in supporting these initiatives. Dell characterized the opportunity as broad-based among major economies, stating that “any country in the top 25 of GDP” has some sovereign initiative underway, whether through governments, telecoms, or affiliated entities.
Internal productivity, cash focus, and shareholder returns
Dell repeatedly emphasized cash flow discipline. On working capital and the company’s historical negative cash conversion cycle, he said it “absolutely matters,” noting that the cash conversion cycle was “flat sequentially” last quarter and that Dell generally does not buy material “till we have a PO from customers.”
He also pointed to internal productivity initiatives tied to AI, including agentic capabilities, describing the company as “rapidly hurtling toward it.” Dell said operating expenses have declined “for four years in a row,” and highlighted guidance that OpEx would move to a “single-digit % of revenue,” which he said “hasn’t happened in 20 years,” while continuing to invest in R&D and go-to-market functions.
In closing remarks on long-term goals, Dell cited shareholder-friendly capital allocation, including repurchasing “54 million shares” and raising the dividend “by 20%.” He said Dell aims to continue generating “strong revenue, earnings growth, free cash flow,” and to outperform relevant benchmarks. Dell added that the company’s long-term framework has included “15% EPS growth,” and said he feels “very good about the future opportunities for our company.”
About Dell Technologies (NYSE:DELL)
Dell Technologies Inc is a multinational technology company that designs, manufactures and sells a broad range of information technology products, solutions and services. Its offerings span client computing devices (consumer and commercial laptops and desktops), enterprise infrastructure (servers, storage systems and networking equipment), software and cloud infrastructure, and a variety of professional services such as IT consulting, deployment, managed services and financing solutions. The company serves organizations of all sizes as well as individual consumers, with products and services aimed at enabling digital transformation and modern IT environments.
Founded by Michael Dell in 1984, the company grew from a direct-to-consumer PC business into a diversified IT provider through organic expansion and strategic acquisitions.
