Lenovo's North America president, Ryan McCurdy, says the AI supply constraints squeezing the industry aren't a warning sign but proof the demand curve is real.

"AI adoption is increasing," McCurdy said. "The challenge is that it's outpacing the inputs into that...decade of AI."

That mismatch is producing higher component costs and supply shortages across the industry, he said, but he frames it as an expected side effect of a sustained boom rather than a problem unique to Lenovo.

Rising supply chain rank

Lenovo's climb up the Gartner Supply Chain rankings is central to its execution story, McCurdy said. Lenovo debuted at 15th in 2020, moved to ninth after the pandemic, and now sits at fifth. He credited that improvement with helping the company secure critical components ahead of the current component crunch that resulted in price increases and product delays.

"We anticipated the constraints, we secured critical supply," McCurdy said, adding that pairing global scale with production spanning 180 countries and 30 sites across 11 countries located close to customers has been a competitive advantage.

A snapshot of the AI industry

The market has split in two. On the data center side, Lenovo is seeing "no slowdown," McCurdy said: AI demand has tripled server revenue YoY, grown the server pipeline 3x quarter over quarter, and expanded the customer base. That is also where component shortages bite hardest, and where prices are climbing fastest.

“The squeeze is having a bigger impact on consumers buying smartphones and PCs,” McCurdy said, as both individual and enterprise budgets get redirected toward AI workloads and modernization.

This is a shift he expects to shrink the overall size of those markets somewhat. He described the rebalancing as intentional rather than alarming: "It's a natural consequence... to make sure supply and demand are in equilibrium."

With the AI component shortage expected to last into 2028, diversified companies like Lenovo stand a better chance of balancing supply and demand. However, the component shortage could still lead to delays and price hikes across its product line.

The next decade: AI moving on-device

Looking ahead, McCurdy pointed to Lenovo's spread across smartphones, PCs, and infrastructure and services as a differentiator, noting the company holds the highest US market-share gain in AI PCs. He expects enterprise AI demand to keep climbing alongside growing interest in "personal AI," or Lenovo’s answer to an always-available assistant embedded at the system level across a user's devices.

Economics is also pushing AI on-premises, he said. As token and subscription costs add up, McCurdy said more enterprise customers are moving workloads into private AI clouds, and he expects "on-prem" to increasingly mean a PC capable of handling far more AI processing locally.

"We're just at the start of a 10-year adoption," McCurdy said. He envisions a shift from complete reliance on datacenter AI workloads to a more hybrid mix of on premises AI business servers and on-device AI workflows to supplement the more expensive cloud-dependent solutions.

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