Dive Brief:
- Dell Technologies has seen supply shortages spread from artificial intelligence computing components to the racks housing AI systems, executives said in a Sept. 1 earnings call.
- The company, which has already dealt with constraints for memory, storage and CPUs, is now facing shortfalls for rack-level cooling, networking and power components as AI computing demand outpaces supply, COO Jeffrey Clarke told investors.
- “How I think about supply, as I’m often reminded by our sales force, it’s not enough," Clarke said. "So we are doing everything we can to get more supply. In today’s environment, that’s a very difficult task.”
Dive Insight:
At Dell, customers continue to order further in advance to ensure delivery when needed — a trend the company reported in the previous quarter, Clarke said. Large, sophisticated customers are moving to the front of the line by sharing demand forecasts through collaborative planning tools.
"That is probably a new phenomenon that's happened in this demand environment today with the constrained supply," Clarke said.
To boost AI systems supply, Dell started redirecting inputs from PC manufacturing into AI infrastructure earlier in the year after seeing signs the PC market would soften in the second half, Clarke said.
“Welcome to the life of a supply chain person at Dell,” Clarke said. “This is what we do, chasing parts. We love it. Trying to optimize the outcomes for the company.”
The shift toward AI product supply helped Dell raise its fiscal 2027 revenue guidance by $25 billion, Clarke said. Earlier in the call, CFO David Kenney said the increase brought the full-year forecast to $192 billion.
"Our ability to increase guidance by the $25 billion is a direct reflection of our ability to optimize what's coming in, shaping demand, planning it accordingly and getting it out the door," Clarke said.
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