Big Tech
Nvidia’s AI Boom Brings Riches to Partners Like Dell, at a Cost
Nvidia Corp. chips during the Taipei Computex expo in Taipei, Taiwan.
Photographer: I-Hwa Cheng/BloombergThis article is for subscribers only.
When Dell Technologies Inc. completes a $5 billion deal to supply servers to Elon Musk’s xAI startup, it will mark an immense win for the 40-year-old computer seller.
But the proposal, tentatively agreed to recently, comes with a detail all too common for server makers in the AI era: a narrow margin of profitability. The plan to supply xAI with AI-optimized servers is expected to yield gross margins only in the mid-single-digits percentage, according to people familiar with the deal.