The underlying message at Dell Tech World (DTW) was about the AI Factory. On the surface, this is a stack of Dell infrastructure products and ecosystem partners that provide what an AI platform needs. However, the keynote indicates it is more than just an infrastructure play. It is an action-based, action-oriented view of the world transformed by AI. The exchange between Michael Dell and Jensen brought this to light in the keynote.
The premise is that we are now in a new class of data centers to support what is churning out new intelligence. This new intelligence results from data being translated to tokens via large language models (LLMs) and trained into manufactured intelligence. In today’s environment and systems, we retrieve pre-stored data using CPU calculations, which are then analyzed, worked on, or transformed into consumable information. Consider the analysis of financial data in a spreadsheet with the expert providing conclusions. In this new intelligence world, generated information is created by feeding the world’s collective knowledge (LLMs) and the practitioners’ knowledge base. The output consists of both data and interpreted information. Depending on the process, a human expert brings in a more significant level of interpretation.
How does this appear in this new factory? Instead of fully human-engineered applications, the AI Factory will assemble AI-generated applications and order through APIs. Instead of human interactions, we will leverage the practical work of system intelligence to streamline the process. Instead of chatbots essentially good at single, simple inquiries, the factory will reason through more complex requests.
Bill McDermott, CEO of ServiceNow, highlighted this, stating that they are already experiencing improvements by 50% or more in code development and customer service. Others have streamlined content development by 90% while maintaining high accuracy. These are the types of advances witnessed throughout the Industrial Revolution.
For those who fear job replacement or elimination, McDermott reminded us that Time Magazine examined the impact of the computer in 1966 and predicted that computers would take over all roles except high-level executives, leaving 90% of the population to live a state-subsidized leisure life. Additionally, “corporate greed has eliminated many workers for machines to fill those jobs instead.” I’m not sure about you, but we appear to be working more than our peers in the 1960s, and we have a long list of jobs that did not exist in 1966.
To spurn this change, AI factory needs to exist. Why? The compute infrastructure, the data platform and pipeline, and the network interconnect are all different from the data center as we know it today. Think of this environment as Henry Ford’s design of the Model-T factory, which produces automobiles. Instead, this design generates information and expertise. The investment cost for the factory systems will be part of the 11 trillion dollars expected to be invested in this new technological advancement. We are just beginning to see this happen, this explains why the valuations of the key component companies are remarkably high.
My final question is: Can this be afforded? The strain on the infrastructure (power, network, changes in people rolls, lack of skills to support the AI Factory, etc.). As with all innovations that challenge the status quo, there will be fallout, failures, and plenty of problems to point to, but our human invention will somehow move us to a higher standard. This is true for the AI revolution and the AI Factory.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other Insights from The Futurum Group:
AI in Context: Reflections on Dell Technologies World and AI Factory
AI for Human Progress – Six Five On the Road at Dell Technologies World
Driving Internal Innovation with AI – Six Five On the Road at Dell Technologies World
Author Information
Camberley brings over 25 years of executive experience leading sales and marketing teams at Fortune 500 firms. Before joining The Futurum Group, she led the Evaluator Group, an information technology analyst firm as Managing Director.
Her career has spanned all elements of sales and marketing including a 360-degree view of addressing challenges and delivering solutions was achieved from crossing the boundary of sales and channel engagement with large enterprise vendors and her own 100-person IT services firm.
Camberley has provided Global 250 startups with go-to-market strategies, creating a new market category “MAID” as Vice President of Marketing at COPAN and led a worldwide marketing team including channels as a VP at VERITAS. At GE Access, a $2B distribution company, she served as VP of a new division and succeeded in growing the company from $14 to $500 million and built a successful 100-person IT services firm. Camberley began her career at IBM in sales and management.
She holds a Bachelor of Science in International Business from California State University – Long Beach and executive certificates from Wellesley and Wharton School of Business.
