Dell Technologies CEO Michael Dell just sounded the first caution bell on the AI data center gold rush. Speaking on CNBC's "Closing Bell: Overtime," Dell said that while demand for AI computing power remains "tremendous," there will inevitably come a point when there are "too many of these things built." The warning comes as Dell's own AI server business exploded 69% last quarter.
Dell Technologies CEO Michael Dell just became the first major enterprise leader to publicly acknowledge what many in Silicon Valley whisper privately - the AI data center boom can't last forever. Speaking Tuesday on CNBC's "Closing Bell: Overtime," Dell delivered a reality check wrapped in optimism: "I'm sure at some point there'll be too many of these things built, but we don't see any signs of that."
The timing of Dell's warning is telling. His company's server networking business just posted staggering growth - up 58% last year and 69% in the most recent quarter. Dell shares jumped over 3% Tuesday after the company raised its annual revenue growth expectations from 3-4% to 7-9%, with earnings per share targets jumping from 8% to 15%. The hardware maker is riding the AI wave harder than almost anyone, selling servers packed with Nvidia's Blackwell Ultra chips to customers like CoreWeave and Elon Musk's xAI.
But Dell's market timing instincts have been honed over decades. The 59-year-old founder built his company by anticipating technology shifts, and his latest comments suggest he's already thinking about the inevitable correction. "As large language models have evolved to more multimodal and multi-agent systems, the demand for AI processing power and capacity has continued to be strong," Dell explained, before adding his cautionary note about eventual oversupply.
The numbers backing Dell's optimism are undeniable. The company reported strong second-quarter earnings in August and announced plans to ship $20 billion worth of AI servers in fiscal 2026 - double what it sold last year. That's a massive shift for a company that traditionally focused on enterprise PCs and basic server infrastructure. Now Dell finds itself at the center of the most expensive infrastructure buildout in tech history.
Dell's warning reflects broader industry dynamics that are becoming harder to ignore. Major cloud providers are pouring hundreds of billions into AI infrastructure, with Microsoft, Google, and Amazon leading the charge. Smaller players like CoreWeave have raised massive funding rounds specifically to build GPU-powered data centers. Even crypto mining operations are pivoting to AI compute.
