Michael Dell says agentic AI is pushing the supply chain crunch into 2028 as demand is outpacing supply and driving up costs.
Dell founder, Chairman and CEO Michael Dell says the agentic AI revolution is extending the timeline for the supply chain crisis into 2028.
“I think if it had not been for this agentic [AI] movement you probably would have seen some better demand supply equilibrium maybe in the second half of next year, but it feels to us like it is getting pushed out a bit from there” said Dell in a press and analyst question-and-answer session at Dell Technologies World.
Dell said it “feels like demand is still growing faster than the supply” with the agentic AI revolution taking hold in the market.
Nvidia CEO Jensen Huang, for his part, who teamed with Dell at a keynote session earlier in the week, said agentic AI has driven Nvidia and Dell demand to an “utterly parabolic” level.
Dell said one of the challenges facing the tech industry is that it “takes a long time” to build a semiconductor factory. “If this was Dell Technologies World three years ago, we weren’t talking about agents and all these things,” he said. “The degree of progress [with AI] has been just extraordinary. The demand has just been growing quite a bit faster.”
Dell said his $113.5 billion company’s decades-long relationships with memory and component suppliers have been “very helpful,” but there is simply “not enough capacity to meet” the global demand.
“I think we are gaining share and we will continue to do our best to meet the demand and align with customers around their requirements,” he said.
As for the reasons for Dell’s supply chain advantage superiority, Dell remarked that it helps to get a larger supply to meet customer demand “when you are four times bigger than your” competitors.
Dell Technologies Vice Chairman and COO Jeff Clarke, for his part, said the “first rule and golden rule” in the Dell supply chain is to “secure the supply” to meet demand whether that’s ISG [Infrastructure Solutions Group] or CSG [Client Solutions Group]. “Scale matters,” he said.
“It’s about securing supply to allow us to grow and meet the needs of our customers,” he said. “The economics of that is the cost is certainly not set by us. We try to work through with our customers how to ‘soften the blow,’ so to speak. But we have a rising inflationary cost environment across all of this. It is beyond memory. It is beyond leading-edge node silicon. It is now into raw materials and with what’s happening in the world it is now fuel moving material around the world.”
Clarke said the company is advising customers to “proactively” plan with Dell to ensure they are able to capture the agentic AI opportunity. “If our sales force was here today, they would tell you we’re entering agreements with our customers and that we are building partnerships that are multiyear,” he said.
Partners told CRN that they are working proactively with Dell on long-term account planning to ensure supply for customers. They said those long-term proactive plans are paying off in sales growth and wins versus competitors, especially given how long the supply chain crisis potentially is going to last.
Several partners told CRN that given the compute, storage and networking demand sparked by agentic AI, they believe the current supply crisis could extend all the way into 2030.
Holland Barry, field CTO for Ashburn, Va.-based DXC, the $12.64 billion systems integration behemoth, No. 14 on the 2025 CRN Solution Provider 500, said the supply chain crisis is “compounding” with a “second wave” of AI inferencing consumption coming on top of the demand from hyperscalers and neocloud providers. He said it is not “unreasonable” to expect the crisis to go into 2030.
Barry believes Dell’s supply chain advantage is “widening” given the demand for agentic AI solutions. He said DXC’s strategic global partnership with Dell gives it a competitive advantage in the midst of the supply chain crisis.
“We have one of the most strategic global partnerships with Dell so in terms of buying power, our access to inventory, our ability to maybe get toward the front of the line for these purchases, we are in an advantageous position,” he said.
“We have customers who are going to a different hypervisor,” he said. “For them it’s imperative to get the hardware as quick as possible because they have to test it and get it up and running.”
Bob Venero, CEO of Future Tech Enterprise, a Fort Lauderdale, Fla.-based Dell Titanium partner, said he believes the current supply chain crisis will at least extend into the first or second quarter of 2028. That said, with agentic AI gaining market momentum it could extend out even further, said Venero. “It depends on the adoption of agentic AI and the success with it,” he said.
Venero said Dell’s size, financial muscle and broad-based buying power with memory and component suppliers over many decades give the company a big advantage over competitors.
“Dell has the ultimate buying power and the ability to go to those memory and component manufacturers with its billions of dollars of buying power and get moved up the stack versus competitors,” said Venero.
Venero said the key for his company is working hand in hand with customers to forecast their demand for the next six to 12 months and even beyond that. “You need to preorder and bring them into inventory or have them staged and ready to go,” he said. “That is the only way you are going to guarantee supply and protect customers from price increases.”
Louis DeVito, director of IT procurement for Johns Hopkins University & Health System, the renowned research university and health system, said he is already working with Future Tech Enterprise and Dell as his strategic partners—as well as other vendors—to build out the procurement plans for a 6-megawatt data center for AI research in September 2027. “The question that came up with Dell here [at Dell Technologies World] is when we will have to place those orders,” he said.
DeVito said Dell’s “buying power” across a broad and deep product line from desktops to servers is a competitive advantage. “Dell supplies everything,” he said.
DeVito praised both Future Tech and Dell for working proactively with him and the Johns Hopkins University team on procurement plans in the midst of the current supply chain crisis. “They are both great strategic partners for us,” he said. “We are here with Dell and Future Tech at this event. We work very well together. It is truly strategic. They are not just selling you something. They are both working together with us. That goes a long way.”
Patrick Shelley, CTO at PKA Technologies, a Montvale, N.J.-based Dell partner, said he expects the supply chain crisis to extend into 2030 given the agentic AI advances.
“The lead times are better with Dell,” said Shelley. “That’s an important advantage. If a customer has a project that needs to get done quickly you can’t wait six months for equipment.”
PKA, for its part, is working with dozens of customers under time constraints to renew their VMware licenses who are looking to migrate to another platform, said Shelley.
Shelley’s advice to PKA customers is to buy now. “This isn’t going to end anytime soon,” he said. “The best price you are going to get is now. That’s what we’re telling customers. If you wait two or three weeks and shop around, your [price] quote expires and then the prices go up.”
Shelley said he believes customers holding off purchases will find higher prices next year with the “supply chain” just as bad as it is today or maybe even worse. “The best thing you can do as a customer is be quick, be agile and be nimble.”
Dell, for his part, said there is simply “more demand” than there is supply.
“We do have an incredibly robust supply chain,” he said. “We’re managing through it. For customers we’re able to create a construct to work with them so they are assured access to the supply that they need. They would like more too, and they would like it faster, but we’re managing through it.”
