Michael Dell: ‘AI Data Center Boom Will Peak One Day — But We’re Not There Yet’
Austin, Texas — Dell Technologies CEO Michael Dell says the current global rush to build artificial-intelligence data centers will eventually hit its limit — but for now, the surge is showing no signs of slowing.
Speaking Tuesday on CNBC’s Closing Bell: Overtime, Dell said demand for computing power remains “tremendous,” driven by the rapid evolution of large language models and next-generation multimodal AI systems.
“I’m sure at some point there’ll be too many of these things built,” Dell said. “But we don’t see any signs of that right now.”
Record Growth Fueled by AI Infrastructure
Dell Technologies’ server-networking business grew 58 percent last year and another 69 percent in the latest quarter, reflecting an unprecedented appetite for AI hardware. The company’s advanced servers are powered by Nvidia’s new Blackwell Ultra chips and sold to major clients such as CoreWeave, xAI (Elon Musk’s startup), and other large cloud providers.
Shares of Dell Technologies climbed more than 3 percent Tuesday after the company raised its long-term financial outlook. Annual revenue growth expectations jumped to 7–9 percent, up from 3–4 percent, while projected earnings per share rose to 15 percent, nearly double the previous forecast.
Dell said the company plans to ship roughly $20 billion in AI servers in fiscal 2026 — twice as many as last year — as global companies race to expand data-center capacity.
The Power Problem: Supply Can’t Keep Up
Despite booming demand, Dell warned that energy supply is becoming a serious constraint for the AI industry.
“It’s the clear constraint that we hear about from our customers, including OpenAI,” he said. “Many customers will tell us, ‘Don’t deliver it until we have power in the building to support it.’ ”
In September, OpenAI partnered with Nvidia to build at least 10 gigawatts of new data-center capacity — roughly equal to the annual electricity use of 8 million U.S. households, according to the Energy Information Administration (EIA).
Meanwhile, tech giants Microsoft, Google, and Amazon have each pledged multi-billion-dollar investments in AI data centers, pushing national infrastructure toward record electricity consumption.
According to the EIA, an estimated 63 gigawatts of new power capacity will be added to the U.S. grid in 2025. OpenAI and Nvidia’s build-out alone would consume about 16 percent of that additional energy.
Balancing Efficiency and Growth
Dell said his company is focused on engineering servers that are as energy-efficient as possible, but acknowledged that innovation alone cannot offset the scale of the industry’s expansion.
“If you’re going to generate tens of trillions of tokens, create intelligence, and drive the economy forward,” Dell said, “you’re going to need computing power — and energy.”
Industry analysts agree that while efficiency improvements will help, the AI gold rush could soon force governments and utilities to confront a new reality: energy grids built for a pre-AI world may not be able to keep up with tomorrow’s digital economy.
For now, Dell Technologies continues to benefit from the surge, betting that the AI infrastructure boom still has plenty of runway before the inevitable slowdown.
