Dell Technologies Sees AI Boom Building as $95B Server Backlog Signals Demand

Dell Technologies CEO Michael Dell said enterprises are in the early stages of adopting artificial intelligence infrastructure, with companies increasingly viewing technology spending as a means of creating value rather than as a traditional IT budget expense. Speaking at the Goldman Sachs Communacopia + Technology Conference, Dell said AI is prompting organizations to rethink business processes, though adoption is progressing at different speeds. He estimated that roughly 10% to 15% of companies understand the strategic importance of AI and are moving to implement it, while many others remain uncertain about how to proceed. “The real opportunity is reimagining the whole workflows,” Dell said. He said companies must simplify and standardize processes, assemble relevant data and then apply AI. While providing employees with AI tools can improve productivity, Dell said broader gains would come from redesigning operations and automating work previously performed by people. Dell said the company has 6,500 enterprise AI Factory customers and is helping organizations deploy AI closer to their proprietary data. He argued that customers in sectors including manufacturing, restaurants, retail and logistics may need AI operating at their facilities rather than solely in centralized cloud environments. “For your most valuable data, your proprietary data, your hard-fought knowledge that only you have inside your company, you don’t want to send that off to somebody else,” Dell said. He characterized enterprise infrastructure as a hybrid, multicloud environment, noting that, by various estimates, 85% of data remains on-premises. Dell said AI adoption is increasing requirements for compute, storage and networking, particularly as companies use more agentic AI systems that require additional CPU capacity. Dell also said return on investment is changing the conversation around technology spending. He offered an example in which a company could reduce a 200-person task to 50 people with a $10 million AI investment, lowering costs while improving results. CEOs and business-unit leaders, he said, increasingly see AI as necessary to become more competitive and innovative. Addressing investor questions about the durability of hardware demand, Dell pointed to aging installed bases in PCs and servers. He said there are 400 million PCs more than four years old and 1.3 million servers that are 13th-generation or older. Higher memory costs have caused some customers to defer upgrades, he said, but those delayed replacements should eventually drive demand. Dell said the semiconductor supply environment could remain structurally constrained, potentially becoming more difficult in 2027 than in 2026 based on what the company s.