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- As billions of dollars wipe out from market value of Microsoft, Oracle, Amazon and other IT giants spooks investors; Michael Dell, who survived two slowdowns; has tips
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As billions of dollars wipe out from market value of Microsoft, Oracle, Amazon and other IT giants spooks investors; Michael Dell, who survived two slowdowns; has tips
Big tech companies, including Google, Microsoft, Amazon and others rode the artificial intelligence (AI) boom to record highs. But spooked investors are pulling back even as billions of dollars vanish from the market value of major IT giants. Now, one veteran executive says his company is built to weather whatever comes next: Michael Dell. The company he started in a college dorm room in 1984 with $1,000 has evolved from selling direct-to-consumer PCs into supplying the massive AI supercomputers tech giants are scrambling to buy. Thanks to a projected 70% jump in revenue for its current fiscal year, Dell Technologies’ valuation is now nearly four times what it was a year ago.While hyperscalers like Amazon and Google – along with AI data-center builders known as neoclouds, such as CoreWeave, Nebius and Crusoe – are taking on heavy debt to fund their AI hubs, Dell is playing a very different financial game, as per a recent report by The Wall Street Journal.
The secret weapon: Let customers fund the build-out
When asked how he is preparing for a potential downturn in the AI cycle, Dell pointed straight to his balance sheet: “There are some new challenges that this presents, but if you look at our cash conversion cycle, it’s still negative.”Essentially, Dell relies on just-in-time manufacturing. It only builds its powerful AI servers and PCs after a customer places an order. By collecting payments from buyers upfront and taking longer to pay its own vendors, Dell sits on that cash for days or even weeks. That gives the company a healthy financial cushion and protects it from getting stuck with warehouses full of unsold hardware if demand suddenly dries up.
$95 billion in back-orders
, and a warning on memory chips
For now, Dell says business is humming. Even with stiff competition from Super Micro, HPE and Lenovo, Dell leads the pack in supplying the computing brains for enterprises building their own AI. It took Dell eight quarters to sign up 3,200 customers building AI data centers with its servers, a list that includes Elon Musk’s SpaceX. In just the last three quarters, it added another 3,300.Right now, Dell is sitting on $95 billion in back-orders for its AI server racks – massive machines that weigh 3,000 pounds each and draw as much electricity as 100 or more typical US homes. The real hurdle isn’t finding buyers; it is getting enough memory chips to actually build and ship the machines. Looking ahead to next year, Dell offered a blunt assessment of the supply crunch: “It’s gonna get worse.”
Another dot-com survivor takes a similar route
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Dell isn’t the only executive who lived through the dot-com bust and is now structuring his business to survive a potential AI pullback. Wendell Weeks, the CEO of Corning, a company whose stock and revenue soared during the dot-com era before crashing alongside the fiber-optic build-out, has adopted a similar playbook. Corning has struck deals with Nvidia, Amazon and Meta Platforms where those tech giants help pay to expand Corning’s fiber-optics manufacturing capacity.As the longest-serving CEO of any Fortune 500 company and one of the wealthiest people in the world, Dell has become a central figure in the AI era. He has been gifted a signed AI server by Nvidia CEO Jensen Huang, earned a shout-out from Elon Musk on X for touring a SpaceX data-center site in a hard hat, and recently received a medal at the White House from President Trump alongside Microsoft CEO Satya Nadella and Google co-founder Sergey Brin.
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