Exploring the Future of AI PCs with Dell’s Sam Burd – Six Five On the Road at Dell Technologies World

By Patrick Moorhead - May 21, 2024

On this episode of the Six Five On the Road, hosts Patrick Moorhead and Daniel Newman are joined by Dell’s Sam Burd, President, Client Solutions Group, for a conversation on the evolving landscape of AI in personal computing. Their discussion dives deep into the exciting developments and future potential of AI PCs, a field where Dell has been pioneering new frontiers.

Their discussion covers:

  • The history and evolution of AI in PCs, highlighting Dell’s early initiatives and contributions to this technology.
  • Current ways Dell’s customers are leveraging AI PCs in their operations and the benefits they are experiencing.
  • Details on the recent AI PC innovations announced by Dell at DTW, outlining what these advancements mean for users.
  • An exploration of the market opportunities AI PCs present for Dell and the tech industry as a whole.

Learn more at Dell.

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Transcript:

Patrick Moorhead: The Six Five is on the road here at Dell Technologies World 2024 in Las Vegas, analysts favorite place and tech companies for having these amazing events. But it has been an amazing event so far. We’ve seen AI everywhere, AI infrastructure, AI PCs, which we can now use the word Copilot+ PCs, AI services, AI software, and everything in between. The keynote was awesome. A lot of big news and a lot of big partner faces.

Daniel Newman: Yeah, it was a really compelling day, and we’ve had a lot of very good conversations here on The Six Five, Pat. We’ve really covered the gamut. Of course, there’s tons of focus right now on ChatGPT and LLMs, but I think every industry that goes through a massive transformation and has a lot of acceleration and momentum, you start to hit a point where people want to get a little bit more practical about it.

Patrick Moorhead: For sure.

Daniel Newman: How does this influence my business? Whether it’s the construction of your IT architecture and modernization for AI, or perhaps it’s what are you going to equip your employees with that gives them more technology, more tools, more productivity and efficiency, Pat? By the way, we’ve talked a lot of infrastructure today. You know we haven’t talked about-

Patrick Moorhead: PCs.

Daniel Newman: Yeah, it was. Yeah.

Patrick Moorhead: Well, the crazy part is that I think today, if we look back in five years from now, I think we’re going to say that today was the biggest day for PCs in decades. I don’t use that. I’m very careful with my words. I was around for internet PCs, I was slinging PCs in 1990. It’s been around. So there is no better person than to talk about this than Sam Burd who basically runs the PC business at Dell. Hey, congratulations today on an amazing announcement.

Sam Burd: Yeah, thank you. Thank you very much. It is an exciting day.

Patrick Moorhead: Yeah, for sure.

Daniel Newman: Yeah. Around the world, the Copilot+, you announced what? Five new PCs with Qualcomm today that Michael talked about from the stage. But here’s the thing, Sam, this is… People always see the culmination moment. They say, “Oh, it’s here.” People don’t often get to really understand the journey that you’ve been on. I’d love for you to talk a little bit about that because the AI PC is a moment, and it’s going to apex over time. But walk us through the journey from where it started to today’s news and the launch of these new designs.

Sam Burd: Yeah, I think you said it really well that we have been on a journey. I do agree. Today is a moment, and it’s a moment the PC was made for. If you think about how we got here, we’ve started shipping tensor cores in workstations back in 2017. You look at the work people have been doing, power users with those workstations in AI space has been pretty incredible. Earlier this year, we flipped the bit on PCs. We had AI in these very high-end workstations, specialized users. We launched Intel’s Meteor Lake CPUs earlier this year. We went from no NPUs in any mainstream PCs to NPUs in mainstream PCs. It’s like that’s a big moment.

You think about, Pat, what you talked about now today going 4x that level of NPU performance. We’re starting to see as the hardware showed up, we’re seeing the software start to show up. We had that moment in the beginning where we said, “You’ve got to believe,” but the hardware needs to come first. And then you see the ISV and the applications come behind that to really take advantage of the capability. And I think we see that in spades with the things Microsoft’s doing around their apps, the operating system, Copilot+, I see it in other people in the ecosystem. Very excited about going, “How do we take advantage of this new capability on all these PCs that we have out there?

Patrick Moorhead: Yeah. Sam, in January of this year, you and I were both onstage of the Meteor Lake announcement and Core Ultra. So your customers actually have the first instantiation of a IPCs. I’m curious, how are they implementing those today?

Sam Burd: Yeah. Pat, we’re seeing them really put those PCs in place. Onstage today I got to talk about one of our customers, Deloitte, really showing off how they’re using those PCs today to run AI workloads in their environment. They’re really doing that as customer zero of an opportunity to touch a whole bunch of customers that they have across industries. So you think about that capability on those PCs, whether it’s NPUs, more powerful CPUs, total tops of those systems, we delivered something really impressive at the beginning of this year when you think about what we can do with those Intel CPUs. We’re seeing that go to use in companies today to start to put apps into their environment. I also see a lot of discussion with customers just going, “How do I future-proof and get ready for things that will come in the future?” So as I keep those systems for two, three years, they’re going to be ready to run the workloads that I need to in the next couple of years.

Daniel Newman: Yeah, I think it’s always great to hear how these are being implemented, Sam. There is this continuum with these AI PCs of how people are going to engage with the NPU today. Of course, we are going to see the apps where… because I still think for instance, something like privacy is a really interesting thing with enterprise data, and how much data is always being inferenced out in the cloud. We’ve got this world where we’ve become a bit numb to all this basically data going out to whatever application that we use. But I think as enterprises see the power of AI, they’re going to want to protect it. That’s why I think your infrastructure opportunity at Dell is so substantial. I also think on these devices, it’s so substantial, but I think people are still metabolizing that idea, digesting it and figuring out is that going to work? I’d love to hear a little bit more from you about that. I realize, I’m throwing a little bit of a left. I don’t know if that’s a curve-ball for you, but you mentioned the Deloitte thing. Is that the killer app?

Sam Burd: Yeah. Well, let me take the first part of your question. We absolutely see the capability that we have in the PC being really important. We talked about AI and technology coming to where the data is, and the data sits at the edge. I think back to the comment Pat made earlier of back in January, we’re having to convince a lot of people that it was going to matter in the PC. It is amazing how fast things move that we’re here a few months later and we’re going like… I think you realized it at the time, Pat, but a lot of people would ask, “Hey, how’s the PC going to play in this?” And now we’re going, “This is potentially the defining moment of what the PC’s going to look like for…” Our company’s been here 40 years. What the next 40 years are going to look like. This personal device with Dan, what you said, your content secure on your device, helping you be more productive is a super, super powerful thing. It’s what I said in the beginning.

It’s like the moment the PC was meant for and, we’ve been building through this to this. Through all these years when people said, “Is the PC going to exist? What’s it going to look like?” Now, we’re like, “It’s more important than ever.” And the capability we can put on that device of a screen, a way of interacting, the power that you can get on that is really pretty important when you think about this role you can play being augmented by AI. You asked me about killer apps. I don’t know, I think there’s two categories though of productivity apps that we have today, getting intelligence built into them that is a game changer and making you more productive and working with some of the Copilot+ features. They’re really good. They make you more efficient in everything that you’re going or doing.

I think the other one that you can’t neglect is companies are going to put intelligence in the work that they need to do for their customers. People have different workflows, different needs. So you’re going to see the PC is a great device to take some of these smaller language models that Michael talked about in his keynote. We keep seeing those come out and now down to 7, 8 billion parameters, I expect we’ll see them even more compact. You think about some of the things Microsoft’s doing, you can run those on devices to help you in that workflow. I think that’s where, we’ll see there won’t be one killer app, but there will be companies figuring out how to make their employees more productive doing the work that’s really valuable and doing that with multiple models running on a PC.

Patrick Moorhead: Yeah. Sam, the great part about today is for the first time, we saw what Microsoft was going to do on the operating system with the new application called Recall and then a bunch of different partner apps that went in there. That was the first time ever that we had all seen it behind closed doors, but now people are finally going to see it. I think that question, the question that what are you going to do with this? There’s not going to be nearly as many of those. Sam, you went all in on Copilot+ PCs today, five of them. Listen, I competed with Dell when I was at Compaq. I was a vendor when I was at AMD, and I’ve been tracking you from an analyst about the last 13 years. I’ve got to say, you’re all in. I’ve never seen Dell this all in on something so new before. I’m curious, what’s the motivator behind that? If things changed, what are you seeing here?

Sam Burd: Well, I’d say Pat, overall, we’re all in on AI. So we see the importance of that. You’ve seen that in the keynotes that we’ve done here and all the discussion we’ve had with you building up to this. We absolutely see it as game changing. Michael talked about a once-in-a-multi-generation opportunity for productivity and enhancement. We’ve talked about no cap on intelligence, AI augmenting and manufacturing intelligence. That’s an amazing thing for where the world can get to. We see that in enterprise. We see that on the PC. So that’s why you see five PCs with Copilot+ capabilities. We will see more coming across our entire portfolio from all our ecosystem of Silicon partners.

So we’re excited about that. We honestly went all in back in January. You look at our commercial systems now, our mainstream and premium systems, they are all shipping with NPUs. Our competitors weren’t as aggressive as us. We believe it’s important. So customers are ready for what’s going to come, and they have great systems. I want them to buy one every year. But I also want the ones we have to be really good when they’re two or three years out there as a CIO going, “Did I get the right stuff?”

Patrick Moorhead: Yeah, but the statement about, gosh, I didn’t expect it to be so broad is the fact that it’s Qualcomm, right? It’s new, a new chip, a new architecture. I was impressed. By the way, I want to get my hands on one of your XPSs as quickly as possible to use that because I’m pretty excited. Quite frankly, I think everything I’ve seen in the last 12 hours indicates to me that fourth quarter will start the beginning of a super cycle. I think you can just imagine if we can just save one year off getting a new PC and by getting more excitement into the premium windows market. I think it’s right here. It’s right in front of us.

Sam Burd: No, it excites me doing amazing devices. I agree with you. I get excited when you say, “Hey, let’s save a year off the refresh cycle.” But you look at all the factors out there. We talked about the earlier in the year. There’s a large installed base. It’s aging. When you think about the COVID spike, we have Windows 10 coming to end of life. There are 300 million PCs more than four years old, many of them can’t run Windows 11. And then you throw a bunch of AI capability on top of that. There’s an opportunity for the super cycle that you described.

Patrick Moorhead: I always like to look at shades of gray versus black and whites. Very similar to what I saw with internet PCs, there was a class of PCs that could do the internet. There was a class of PCs that couldn’t. They couldn’t run Mosaic. They weren’t connected. They didn’t have RJ45 jacks, couldn’t connect to a DSL modem. I feel like, am I overplaying this right now? But our Copilot PCs can do things that fundamentally other PCs just can’t do.

Sam Burd: Yeah. I think they give you that capability. I think you said it well. We went from, a doesn’t have to a does have. It’s like flip the… In our digital terms, zero to one. It is a big change, and you think about that capability you need to have in the future. I would be making sure I have something with an NPU and great capability in that device. You think about GPUs, we’ve been running AI workloads in that space. It’s going to be important in the future. I look at the early days of the… I go back sometime in this space. I think about the early days of the PC where you just saw step function improvements in performance. We have that facing us with AI. That’s going to be, you want it today? It’s going to be better a year from now. It’s going to be better two years from now. So that’s some of the conundrum customers have of you’ve got to put great tools though in the hands of your employees. If you don’t, you’re not going to have the best employees

Patrick Moorhead: That’s right.

Sam Burd: The companies that invest are going to win. You’ve got to figure out that in your infrastructure, and you need to figure that out with the people that are doing work in your enterprise.

Daniel Newman: There’s nothing wrong with creating a little FOMO among your employees and among the CIO community that want to make sure that they’re equipping their productivity workers with the tools that will enable them to do more. In the end, by the way, that generally leads to more revenue, more profitability, greater success, greater enterprise value, which talk about something. If you can get that momentum, create that pull forward six months a year. It could create a really great growth story for Dell. Of course, you’ve gone Silicon diverse. You’re going to have options across the spectrum. What you announced today was very exciting as well.

Sam Burd: Yeah, we’re going to put best options out there for customers. I think you described it well. You think about everything with AI as an employee and someone doing work, you want to be enabled with that. I don’t want to go, “Hey, I am working alongside other people.” You’re telling me work harder, not better. How do I get the most out of someone? That’s exactly the opportunity that we have here.

Daniel Newman: All right, Sam. Well, thanks so much for joining us here on The Six Five. It’s been great to have you in the studio, and I look forward to having you back soon.

Sam Burd: Sounds good. Thank you very much. Thanks for having me.

Daniel Newman: All right. Everybody, stay with us here. We are at Dell Technologies World 2024 in Las Vegas. It’s been a great day. We’ve covered all kinds of ground, but we have so much more content to come to you. But for this show, this episode from Patrick Moorhead, from myself, signing off for now. See you all really soon.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.