Michael Dell has likened the current memory crisis to the ‘Superbowl’ for his firm, as he predicted AI memory demand will surge 625-fold.
As his eponymous firm surfs booming demand for AI infrastructure, the Texan PC baron has risen to eighth in the Forbes Rich List.
On a call with Bank of America this week, Dell claimed he relishes “supply chain challenges” like those currently being fuelled by memory-hungry AI datacentres.
“We kind of love it when there’s a supply chain challenge because it’s kind of like the Super Bowl for us. We’re ready for that,” he said on the call (a transcript of which can be found here).
“Obviously, we took our guidance up a lot. We have the supply for our guidance. We’re out looking for more supply.”
“They’re scared little puppies”
Dell warned “extraordinary demand growth across the industry” will result in “all sorts of constraints” in the coming years.
When it comes to AI demand, within a couple of years, there will be 25 times more memory per accelerator and 25 times more accelerators (equating to a 625-fold increase overall), he predicted.
Semiconductor manufacturers like Micron still have “PTSD” from the collapse in sales they experienced in 2023, making them “very careful about investing” in building new memory plants, Dell added, however.
“They’re like scared little puppies,” he said.
“And so yes, there’s big supply constraints.
The good news is that Dell is “not a monoline company” and has relationships with the manufacturers dating back to the 1980s, Dell said.
“So we feel that the environment advantages us,” he said.
“And of course, scale.
“If you look at our scale, our server and storage business is 4x larger than any single competitor generally, and we’re larger than #2, #3, #4, all combined together.”
“Prices may come down, but probably not”
Asked how the memory crisis is impacting customer behaviour, Dell suggested those hanging on for the trend of rising prices to reverse are kidding themselves.
“Maybe [the price] will come down… but probably not,” he said.
“You can delay the purchases for a while, and there is some demand destruction, certainly in low-end phones and low-end PCs. But about 500 million of the 1.5 billion PCs in the world are four years old or older. So if you work at a company, let’s say, with knowledge workers and now you’ve got a four-year-old PC, this is a bad situation, right?
“…And then with servers, we still have the majority of our installed base of servers are 14G or older. We’re on 17G now. So that’s a 7:1 consolidation benefit.”
