Managing Demand and Investments in AI Servers

• Shipment and Backlog Management

  • Shipped $2.9 billion in AI servers during Q3.
  • AI server backlog stands at $4.5 billion, indicating strong ongoing demand.
  • Five-quarter pipeline increased by over 50% sequentially, reflecting sustained growth across all customer segments.

• Enterprise Customer Growth

  • Expanded to over 2,000 unique Enterprise customers since the launch of AI servers.
  • Enterprises are increasingly adopting GenAI, leading to more experimentation and proof-of-concepts.

• Product Innovation and Deployment

  • Launched several advanced AI server solutions, including:
    • 21-inch ORv3 Integrated Rack 7000: Available in 44 and 50 OU rack designs with integrated cooling, power, and networking, scalable up to 480 kilowatts per rack.
    • GB200 NVL72 Server Racks with XE9712: Features direct liquid cooling supporting up to 72 GPUs per rack.
    • New AI Server Supporting NVL-4: Supports up to 144 GPUs per rack, one of the industry's densest designs.
    • M7725 and IR5000: High-performance compute designs supporting up to 27,000 CPU cores and 96 GPUs per rack, respectively.
  • Enhanced PowerScale products:
    • PowerScale F710: Updated with 61TB of QLC SSDs and a capacity density of 614TB per rack unit.
    • New software releases improved streaming write performance by 163% and streaming read performance by over 2x compared to the previous generation.

• Strategic Investments

  • Engineering Leadership and Professional Services: Focused on high-value engineering and a solutions-oriented mindset to deliver custom designs and rapid deployments.
  • Supply Chain and R&D: Accelerated innovation speed to meet GenAI demands, investing in supply chain capabilities and research and development.
  • Go-to-Market Strategies: Implemented specialized pursuit teams targeting both digital-native and enterprise customers to capture diverse market opportunities.

Customer Demands and Market Sentiment

• Strong Demand Indicators

  • Continuous growth in AI server orders, with sequential growth every quarter since the XE9680 launch.
  • Enterprises recognize the disruptive potential of GenAI, driving higher innovation and productivity levels.

• Customer Engagement and Satisfaction

  • Broad enterprise coverage ensures that both large and small enterprises are gaining traction.
  • High-speed, large-scale system designs meet the specialized workload requirements of enterprise AI deployments.

• Market Sentiment

  • Positive outlook as enterprises are only in the early stages of AI deployment, indicating significant future growth potential.
  • Dell’s ability to innovate quickly and deliver customized, scalable solutions enhances customer confidence and market positioning.
  • The robust pipeline and backlog reflect strong market demand and trust in Dell’s AI server offerings.

• Competitive Positioning

  • Dell is the first to market with several AI server innovations, leveraging speed and differentiation as key competitive advantages.
  • Continued investment in AI-related profit pools such as power management, cooling solutions, and financial services supports a comprehensive AI ecosystem.

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Dell Technologies Inc Class C is effectively managing the high demand for their AI servers through strategic investments in product innovation, engineering excellence, and scalable deployment solutions. The strong customer demand and positive market sentiment are driven by Dell’s ability to deliver customized, high-performance AI infrastructure that meets the evolving needs of enterprise customers.