How This Dot-Com Era CEO Is Navigating The AI Boom

SPEAKER_1 (0:01)

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Danny Lewis (0:34)

Welcome to Tech News Briefing. It's Monday, October 19th. I'm Danny Lewis for the Wall Street Journal.

More than 40 years after Michael Dell founded his namesake direct consumer PC company in his dorm room, Dell Technologies has pivoted to rapidly building the powerful supercomputers AI data centers rely on. But even as spooked investors flee some of the big tech companies that soared to new heights on back of the AI boom, Dell says his company is ready to weather a storm.

WSJ Tech columnist Christopher Mims recently spoke with Dell about the company's strategy in the AI era and how it's prepared for a possible downturn. And for today's episode, we're bringing some of their conversation to you.

Christopher Mims (1:14)

A substantial portion of your business remains sales to companies like Dow Jones, where we are, right?

Danny Lewis (1:19)

Correct.

Christopher Mims (1:20)

But the growth driver is, to me, this very peculiar, almost alien object, which is the, I call it the AI supercomputer.

It's six feet tall, it's two feet wide, it's three feet deep, but it weighs 3,000 pounds. And it draws as much power as a hundred typical US households, or maybe two or 300, if it's like a really high end. And this is the brains of these new AI data centers.

Michael Dell (1:47)

If you think about what's happening now, we're sort of going through this shift from, we had like 60 years of calculating and computing, and that's what people did with computers. And now we have these models that are creating a kind of intelligence, right?

Christopher Mims (2:05)

Artificial intelligence, or super intelligence, depending.

Michael Dell (2:08)

Pick your phraseology, right? But basically, there's a lot of demand for that, whether it's in hospitals, improving their clinical workflows, or manufacturing, improving their output, and all sorts of other uses. I mean, it's kind of universal that people want to use their data more effectively to create better outcomes in whatever they're doing.

Christopher Mims (2:34)

Right. So AI is a way for them to get more value.

Michael Dell (2:36)

Right. And it can show up in many different forms, right? It's like in your PC, might be in your car, right? It might be in your refrigerator.

It might be in your data center. It might be in the cloud, right? It shows up in many different places. And when you're building large scale infrastructure, either to train the models or to serve up all the answers.

Christopher Mims (3:01)

Right. So I go on Chetjibiti, I'm talking to the cloud.

Michael Dell (3:04)

Exactly. Yeah.

Christopher Mims (3:06)

I want to anchor this in some very concrete things that you have built. So for example, Dell did half of the servers in the Colossus 1 AI supercomputer for SpaceX. And you did it really fast, right? I think that was a record fast build. It was like six weeks or something.

Michael Dell (3:25)

Elon is probably the most demanding customer. No, he's definitely the most demanding customer there is.

Christopher Mims (3:31)

What do you learn from building that data center in six weeks? Normally, data centers take six months, right?

Michael Dell (3:36)

Well, Dell first entered the server business in 1989, when I was 24 years old. It didn't actually work the first time, okay? It started working around the mid-90s.

And so we've actually been in this business a long time. So it shouldn't be too surprising that we're also number one in AI infrastructure. But to your point, these systems are incredibly complicated. It's not just a rack with a bunch of chips in it, right?

Christopher Mims (4:04)

No, it's full of plumbing now.

Michael Dell (4:06)

Well, it's millions of miles of fiber optic cable and engineering the liquid cooling to be super power efficient, the storage, the networking, the deployment, teams that come in and make these things all work and then keep them running all the time.

Christopher Mims (4:24)

Right, because each one of these boxes is like six figures.

Michael Dell (4:28)

They're pretty expensive, right? And we have learned a lot about how to quickly deploy these because we have this demand coming from customers.

Christopher Mims (4:40)

Let's talk about lessons from your big Neo Cloud, like hyperscaler customers, the folks that are standing up these big data centers that we read often about in the news. You're transferring these lessons now because companies are coming to you and saying, we want our own AI, which means we have to have our own AI infrastructure, right?