Dell’s AI Server Orders Surge Past $2bn, Fuelling Data Centre Segment Growth

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Dell Technologies, the renowned PC manufacturer, has reported that its data centre equipment business has become its most profitable segment, with orders for AI servers surpassing $2 billion. While the company projects a modest 2.5% revenue increase from its PC division, it anticipates a substantial growth rate of around 7% in the division that sells servers, data storage, and related infrastructure.

The surge in demand for artificial intelligence (AI) is driving this growth, as AI requires more powerful machines, including servers equipped with graphics processors and high-capacity storage. Dell’s COO, Jeff Clarke, stated that AI is additive and will contribute to the overall increase in technology spending.

Dell’s backlog of orders for servers designed for AI use has exceeded $2 billion, indicating a strong demand for advanced computing solutions. However, the company faces challenges due to a shortage of high-power chips, which has affected the entire tech industry. The demand for servers and other hardware is currently outpacing supply.

Despite these challenges, Dell has raised its long-term profit growth forecast and plans to buy back more stock. The company aims for adjusted earnings per share to grow by at least 8% annually.

Michael Dell, the founder and CEO of Dell Technologies, affirmed the company’s commitment to remain publicly traded. This statement comes after Dell was ordered to pay over $6.4 million by Australia’s Competition and Consumer Commission (ACCC) for misleading pricing practices on its websites.

In August, Dell was found to have displayed strikethrough prices for monitors, giving customers the impression of greater savings. However, this pricing practice was deemed misleading by the ACCC and resulted in the fine.

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These developments come in the wake of Dell’s global hiring slump, which saw the company announce job cuts of approximately 6,650 positions, accounting for 5% of its global workforce. The downturn in the personal computer market was cited as the reason for the layoffs.

Despite these challenges, Dell Technologies remains focused on its data centre segment, capitalizing on the growing demand for AI and positioning itself for further expansion in the technology market.

Frequently Asked Questions (FAQs) Related to the Above News

What is driving the growth in Dell's data centre equipment business?

The surge in demand for artificial intelligence (AI) is driving the growth in Dell's data centre equipment business. AI requires more powerful machines, including servers equipped with graphics processors and high-capacity storage.

How much revenue increase is projected for Dell's PC division?

Dell projects a modest 2.5% revenue increase from its PC division.

What is the anticipated growth rate for Dell's division that sells servers, data storage, and related infrastructure?

Dell anticipates a substantial growth rate of around 7% in the division that sells servers, data storage, and related infrastructure.

What is the value of Dell's backlog of orders for servers designed for AI use?

Dell's backlog of orders for servers designed for AI use has exceeded $2 billion.

What challenges does Dell face in its data centre business?

Dell faces challenges due to a shortage of high-power chips, which has affected the entire tech industry. The demand for servers and other hardware is currently outpacing supply.

What is Dell's long-term profit growth forecast?

Dell has raised its long-term profit growth forecast and aims for adjusted earnings per share to grow by at least 8% annually.

What was Dell ordered to pay by Australia's Competition and Consumer Commission (ACCC)?

Dell was ordered to pay over $6.4 million by ACCC for misleading pricing practices on its websites.

Why did Dell announce job cuts in its global workforce?

Dell announced job cuts of approximately 6,650 positions, accounting for 5% of its global workforce, due to the downturn in the personal computer market.

Is Dell planning to remain publicly traded?

Yes, Dell's founder and CEO, Michael Dell, affirmed the company's commitment to remain publicly traded.

Is Dell still focused on its data centre segment despite the challenges?

Yes, despite the challenges, Dell Technologies remains focused on its data centre segment and aims to capitalize on the growing demand for AI while positioning itself for further expansion in the technology market.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

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