Dell CEO: We Could Need 100X More Data Centers in 10 Years – SXSW 2024

With heightened demand for AI services, data center capacity might have to increase by 100 times from current levels in 10 years, according to Dell founder and CEO Michael Dell.

“There definitely needs to be a big build out of data center capacity for sure,” Dell said during a fireside chat at SXSW 2024. “There are already lots of projects all over this country and around the world to build out that capacity.”

But “we could need 100 times more of this in 10 years than we have today,” he added. “Nobody’s quite sure, but it’s a lot more than we have right now.”

Building out more data centers, Dell said, takes “significant” expense and time – transmission lines have to be approved, new energy sources must be found to fuel all the systems, among other factors to consider.

Consider that doing a Google search uses a “certain amount of computing power or a certain amount of electricity. But (witih generative AI,) when you go ask a complicated question and you get back a super-sophisticated answer, it’s like 1,000 times more power” to process, he explained.

Demand for generative AI will continue to increase because once people know they can get a better answer from AI models, they are not going back to the old way of searching, Dell said.

Cost of cognitive superpower: Near zero

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“These days, it’s all about AI,” Dell continued. “It's a big platform shift and it's just beginning. We're in maybe Year 1 or 2 of the big AI revolution.”

Compared to prior technology revolutions, such as the internet, Dell said the AI wave “feels bigger, more important and more significant than any of the prior ones. … It’s going to be an enormous leap forward in all domains.”

Changes are coming faster in AI as well, perhaps 10 times faster than the internet’s growth, said Dell, who started his company in 1984 during the internet revolution.

“In almost no time, we have five billion people with PCs and phones accessing AI,” he added. “The cost of having a cognitive superpower .. is approaching zero.”

“What does that mean? For education, for health care, for science, or any aspect of humanity?”

While AI has been around for years, breakthroughs in machine learning 10 years ago - and more recently with large language models, robust retrieval techniques and other innovations - these have been moving society from using machines for “computing and calculating to cognitive power,” he said.

Dell said this shift requires new architecture: new compute, new memory, new storage, new network and new software models of all sizes.

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Here, he sees an opportunity for his company to equip corporate clients, noting that 75% of data still sits on-prem instead of going to the public cloud. “Customers want to bring AI to their data not the data to their AI.”

Companies have “their own data, they want it secure, they don’t want to share it with anybody else, they want it for their benefit and for their customers’ benefit,” Dell continued. “And in many cases they are under regulatory requirements to secure it and protect it because it is the most valuable asset that these organizations have.”

That is why bringing AI to the enterprise is an “enormous priority for us,” Dell said.