Michael Dell has overtaken Jeff Bezos. What makes the story remarkable, however, is not the ranking itself but the road that led there. Just over a decade ago, many regarded Dell’s business model as outdated. The PC market was shrinking, smartphones and tablets were reshaping the industry, and the company’s stock was disappointing investors. Michael Dell took his own company private and bet billions that there would be a second act. Today, that second act is called artificial intelligence.
Ahead of Jeff Bezos for the first time
On Tuesday, Forbes estimated Michael Dell’s fortune had risen by $4.6 billion to $267.7 billion. That put the 61-year-old ahead of Amazon founder Jeff Bezos for the first time. Bezos was valued at $265.2 billion after a decline in Amazon shares. Larry Page ranked second with $277.9 billion, while Elon Musk remained far ahead at $942 billion.
Real-time billionaire rankings move with the stock market and can change from one day to the next. Even so, third place marks a first for Dell.
The immediate reason is the extraordinary rise in Dell Technologies shares. The stock closed Tuesday at a record $533.88. According to Forbes, it has gained around 327 percent since the beginning of the year. Michael Dell still owns roughly 40 percent of the company, meaning every major move in the share price has a direct impact on his personal wealth.
A year ago, Forbes estimated his fortune at around $129 billion.
But those numbers tell only the latest chapter of a much longer story.
The computer business that began in a dorm room
Dell belongs to the classic generation of American tech founders — except that his story did not begin in a garage, but in a college dorm room.
At 19, Michael Dell began selling customized computers from his room at the University of Texas. During his first year of college, the business generated around $80,000 in sales. In 1984, he founded the company that would later carry his name.
The model was simple but disruptive: Dell sold computers directly to customers and built them to order. By cutting out much of the traditional retail chain, the company could keep inventories low and introduce new components faster than many competitors.
The business grew rapidly. Dell became the world’s largest PC manufacturer for a time, and Michael Dell became one of the best-known technology entrepreneurs of his generation.
Then the market changed.
By 2013, the future looked very different
Smartphones and tablets were taking over more of the tasks once performed by traditional computers. The global PC market came under heavy pressure, while Dell struggled to build new businesses large enough to compensate for weakness in its core market.
In 2013, Forbes described Dell as a struggling PC maker. Blackstone even withdrew from a potential takeover bid, pointing among other things to the historic decline in the PC market and what it called a rapidly deteriorating financial profile. Dell had already cut its own forecast for annual operating profit from $3.7 billion to $3 billion.
The company itself made no attempt to disguise the scale of the problem. In documents related to the proposed privatization, Dell said its transformation was “critical” to its future. Cloud computing, smartphones and tablets, along with aggressive low-cost competitors, were putting its PC business under intense pressure.
At the time, most of Dell’s business still depended on a market whose long-term prospects were increasingly uncertain.
Michael Dell chose an unusual response:
He took the company off the stock market.
Michael Dell bet billions on himself
Together with private-equity firm Silver Lake, Dell bought the company for around $25 billion in 2013. It was one of the largest leveraged buyouts of a technology company at the time, and Michael Dell committed billions of dollars of his own wealth.
The move was controversial and triggered a bitter battle with activist investor Carl Icahn. But for Dell, going private had one major advantage: he no longer had to justify the company’s transformation quarter by quarter to public-market investors.
The goal was to turn Dell from a PC manufacturer into a much broader enterprise technology company.
Three years later came an even bigger bet.
In 2016, Dell acquired data-storage specialist EMC in a deal valued at around $67 billion when it was announced, making it one of the largest technology transactions ever. The combination created Dell Technologies, with a portfolio spanning servers, storage, enterprise software and infrastructure.
In 2018, Dell Technologies returned to the public markets.
Then AI arrived — and Dell suddenly had exactly the right business
There is a certain irony in what happened next.
The technological shift now driving Dell’s extraordinary growth is helping a company whose traditional hardware business had once been dismissed as yesterday’s story.
Artificial intelligence requires vast amounts of physical infrastructure: high-performance processors, servers, storage, networking equipment and entire data centers. Nvidia may supply many of the chips, but companies such as Dell turn those components into systems that customers can actually deploy.
And that business is exploding.
In the second quarter of its current fiscal year, Dell generated a record $47 billion in revenue, up 58 percent from a year earlier. Adjusted earnings per share rose 203 percent to $7.04.
AI servers alone generated $16.4 billion in quarterly revenue. Even more striking were the orders. Demand for those systems reached a record $60.9 billion during the quarter, while Dell’s AI-server backlog climbed to $95 billion.
The company responded by raising its full-year revenue forecast from $167 billion to $192 billion. Dell has suddenly become one of the most visible beneficiaries of the global AI infrastructure boom.
From PC seller to shovel maker in the AI gold rush
Michael Dell does not necessarily need to know which AI model will ultimately win. Whether OpenAI, Anthropic or another competitor ends up building the dominant platform matters only to a certain extent for his business.
They all need computing power.
And that creates a familiar dynamic seen throughout economic history: while everyone else searches for gold, somebody sells the shovels.
Dell is now selling some of the most expensive shovels of the AI era.
The scale of the opportunity can also be seen in the company’s customer base. Dell now says it has 6,500 AI customers, up from 5,000 just one quarter earlier. Its more traditional server business is growing strongly as well.
The company also says it was the first vendor to ship complete rack-scale systems based on Nvidia’s new Vera Rubin platform.
That is why third place is not the most remarkable part of the story
Billionaire rankings are snapshots. A strong trading day for Amazon or a decline in Dell shares could reverse the order between Bezos and Dell almost immediately.
A more revealing comparison may therefore be with 2013.
Back then, Forbes estimated Michael Dell’s wealth at around $15 billion. He was fighting for the future of a company whose most important market was shrinking structurally.
Today, according to the same Forbes methodology, he is worth almost $268 billion.
There was no entirely new company in between. No dramatic abandonment of the original business.
Dell did something more difficult: he rebuilt an already enormous company while the model that had originally made it successful was losing momentum.
He took it private, borrowed heavily to finance one of the biggest acquisitions in technology history, returned it to the stock market years later — and ultimately positioned the company exactly where the next major technology cycle would require enormous amounts of hardware.
That makes Michael Dell’s move ahead of Jeff Bezos more than another headline from the surreal world of billionaire rankings.
It is the story of an entrepreneur whose greatest success did not come from making sure his first idea worked forever. It came from recognizing early enough that it would not.
SK
