Dell’s public retreat from “AI PC” marketing at CES 2026 marks a rare moment of honesty in an industry that has spent two years insisting artificial intelligence would single‑handedly restart the PC upgrade cycle. Instead, one of the sector’s most important players is now acknowledging what consumers have quietly signaled all along: people are not buying laptops just because they “have AI.”
Kevin Terwilliger, Dell’s head of product, put it bluntly: “What we’ve learned over the course of this year, especially from a consumer perspective, is they’re not buying based on AI. In fact I think AI probably confuses them more than it helps them understand a specific outcome.” With that one line, delivered during Dell’s CES 2026 briefings, the company effectively declared the end of the “AI PC” as a meaningful category—at least for now.
This reversal is not about Dell dropping AI hardware. Every new consumer laptop the company unveiled at CES comes with a built‑in neural processing unit (NPU), Intel’s next‑generation Panther Lake CPUs, and the underlying capabilities needed to run AI workloads locally. The shift is about something more fundamental: a recognition that AI, as marketed to everyday PC buyers, has become a confusing promise rather than a clear reason to upgrade.
—
From “AI‑First” to “We Got It Wrong”
To understand the magnitude of this pivot, it helps to rewind to CES 2025.
In 2025, Dell was one of the loudest champions of the “AI PC” narrative. The company rebranded major laptop lines, downplayed long‑standing product names, and aligned itself tightly with the idea that dedicated NPUs and AI‑enhanced Windows 11 features would define the next generation of personal computing. Like many competitors, Dell and its partners in silicon and software—most notably Intel and Microsoft—framed AI as the central reason to buy a new PC.
Twelve months later, that story has collapsed.
At CES 2026, Dell executed a double reversal:
– It restored the XPS brand as the flagship premium notebook line, walking back the generic “Dell Premium” naming that had replaced it.
– It pulled AI out of the spotlight, removing AI‑first positioning from product messaging even though the hardware still supports AI across the board.
Internally, executives are treating this not as a subtle adjustment but as a correction. Dell’s vice chairman and COO Jeff Clarke described the past year’s consumer PC performance as “unacceptable” and admitted the company had “gotten off course” by leaning too heavily into AI branding at the expense of clear, familiar value propositions. His phrase “un‑met promise of AI” neatly captures the problem: the industry promised transformative benefits that, for most users, never materialized at the desktop level.
The consequences were immediate. Dell’s so‑called “honesty offensive” at CES 2026, while praised by many observers as refreshingly candid, unsettled investors. Coverage of the event noted that Dell’s stock slid as analysts absorbed the implications: the anticipated AI‑driven consumer PC rebound is weaker—and perhaps more illusory—than previously advertised. Dell even trimmed its revenue outlook, acknowledging that AI PC sales simply will not deliver the upside baked into earlier forecasts.
—
Consumers Don’t Buy Specs; They Buy Outcomes
Dell’s executives hammered on a single theme: AI, as a selling point, has failed because it is not attached to a clear, tangible outcome for consumers.
For years, PC marketing centered on straightforward concepts:
– Faster CPUs meant snappier performance.
– More RAM and storage meant smoother multitasking and more room for files.
– Better displays and design meant a more premium, enjoyable experience.
By contrast, the AI PC pitch has been abstract and often circular. Consumers have been told that AI PCs are “future‑proof” or “AI ready,” but not what that means in the context of everyday tasks like browsing, office work, video calls, and light creative work. Many AI “features” highlighted by OEMs turned out to be rebranded versions of existing utilities—like presence detection or background blur—now running more efficiently on NPUs but not delivering fundamentally new value.
NotebookCheck points to multiple examples where laptop makers, including Dell and others, simply renamed long‑standing software tools as “AI features” once NPUs arrived. In practice, that meant:
– Presence detection that used to be a simple sensor‑driven function became an “AI attention” feature.
– Noise suppression or webcam enhancement, once just “smart” utilities, became “AI noise reduction” or “AI vision.”
Functionally, these tools improved, but they did not transform the user experience in a way that justified a premium price or a major marketing shift. For many buyers, the AI label looked like cosmetic hype plastered onto features they either already had or did not particularly care about.
Terwilliger acknowledged this disconnect explicitly. Dell found that AI messaging “confuses more than it helps,” obscuring rather than clarifying why a user should choose one laptop over another. In other words, AI became a spec with no story—a technical capability in search of a compelling everyday use case.
—
The AI PC as a Failed Category—For Now
The industry’s great hope was that AI PCs would behave like past generational shifts:
– 64‑bit processors,
– multi‑core CPUs,
– SSDs replacing HDDs,
– high‑refresh gaming displays.
Each of those transitions brought visible, easily understood benefits. Boot times plummeted when SSDs arrived. Games and media ran visibly smoother on better GPUs and screens. Consumers might not have cared about the exact chip model, but they immediately noticed the difference.
AI PCs, by contrast, lack a killer app at the consumer level. NPUs are powerful in theory, but the genuinely transformative workloads—massive model training, enterprise‑grade inference, complex data analysis—are still overwhelmingly happening in the cloud or in the data center, not on a student’s or office worker’s laptop. Local text and image generation exist, but they remain niche, technical, and poorly integrated into mainstream workflows.
Microsoft’s own push around Windows 11 AI features and Copilot has not changed that calculus. Copilot, like other large language model interfaces, still depends heavily on cloud connectivity and does not require NPU‑equipped hardware to function at a basic level. As NotebookCheck notes, there is “no clear added value” to Copilot on an AI PC versus a regular PC for many users, especially when most interactions involve cloud‑hosted models.
The result is a category that technical insiders understand but average buyers do not. Dell’s admission that consumers “are not buying based on AI” is less a repudiation of the technology itself than a verdict on how prematurely it was marketed as a standalone reason to upgrade.
—
A Shift Back to the Fundamentals
In response, Dell is re‑centering its consumer PC strategy around traditional buying drivers:
– CPU and overall performance – highlighting Intel’s Panther Lake processors and tangible speed improvements.
– Battery life and efficiency – an area where NPUs can silently help by offloading certain tasks, but without being a headline.
– Design, build quality, and display – with the revival of XPS signaling a renewed emphasis on premium industrial design and user experience.
– Price and value – increasingly critical as component costs rise and economic conditions put pressure on discretionary upgrades.
This is not a retreat from AI as a capability. Terwilliger was careful to stress that “everything that we’re announcing has an NPU in it” and that Dell remains “very focused on delivering upon the AI capabilities of a device.” The difference is where and how AI is presented:
– AI becomes a supporting technology, not the star of the show.
– Marketing focuses on outcomes—longer battery life, smoother video calls, faster photo edits—without requiring the buyer to care that an NPU is involved.
– The AI story shifts from “buy this because it has AI” to “this laptop is better at the things you already do—and AI is one of the tools making that possible.”
That repositioning also helps Dell tackle a practical challenge: the 2026 hardware squeeze. Clarke has warned about a “significant” memory shortage and rising component costs as the industry heads into the year. In that environment, consumers are even less inclined to pay a visible premium for esoteric capabilities. They want stable pricing, reliable performance, and clear value.
—
Broader Industry Implications
Dell is unlikely to be alone in this recalibration. Its CES 2026 briefings reflect what multiple observers describe as an industry‑wide cooling of AI PC hype. If one of the largest OEMs publicly concedes that the AI PC branding push has failed to move the needle, competitors will face pressure to reassess their own strategies.
Several implications stand out:
1. The AI PC “super‑cycle” is at risk.
Many forecasts assumed AI PCs would trigger a replacement wave akin to the shift from HDDs to SSDs or from Windows XP to Windows 10. Dell’s new guidance, which lowers expectations for PC revenue growth tied to AI, suggests that scenario is unlikely to materialize on the consumer side—at least in the near term.
2. Marketing narratives will shift from buzzwords to use cases.
Dell’s candid admission raises the bar for the rest of the field. Pure “AI PC” branding without concrete benefits may now look outdated or even misleading. Vendors will need to highlight specific workflows—video conferencing, creative apps, personal productivity—that AI genuinely improves, rather than relying on AI‑as‑a‑label.
3. Windows and platform‑level strategies face scrutiny.
Microsoft’s Windows 11 roadmap, heavily focused on AI‑driven features and integrated assistants, assumed that hardware and software co‑marketing would create a virtuous cycle. Dell’s experience shows that this top‑down strategy has not yet converted into purchase intent. Platform owners may have to rethink how aggressively they push AI as a marquee feature versus a background enhancement.
4. Enterprise AI remains the bright spot.
While consumer AI PCs underwhelm, Dell’s server and infrastructure business is thriving, with a large AI server backlog that continues to drive growth. Investors and strategists are already penciling in a pivot: less emphasis on AI as a retail differentiator, more on AI‑enabled productivity in the data center and enterprise, where ROI can be measured in throughput, cost savings, and new services.
5. Trust and transparency may become competitive advantages.
Dell’s openness about its missteps—rebranding failures, misjudged AI messaging, unrealistic expectations—has been risky in the short term, as reflected in its share price reaction. But it also positions the company as a more credible narrator in a market increasingly skeptical of hype. If consumers and enterprise buyers feel they are being leveled with, that may pay dividends over time.
—
Is This the Beginning of the End for AI Hype—or Just a Reset?
It would be a mistake to read Dell’s move as evidence that AI itself is over. AI remains deeply embedded in the future of computing—from cloud infrastructure to edge devices, from security to creative tools. What Dell’s shift reveals is more specific: AI as a front‑of‑box consumer marketing label has outrun the reality of current use cases.
Several factors could eventually reverse that judgment:
– If local models become small and efficient enough to deliver dramatically better offline assistants, creative tools, and personalized automation on consumer laptops, NPUs might finally become something users can feel and value.
– If operating systems and key applications build compelling, everyday AI workflows—for instance, seamless multi‑app summarization, smart content generation tightly integrated into productivity suites, or robust, privacy‑preserving on‑device AI—then the hardware story becomes easier to tell.
– If AI PCs can be credibly linked to cost savings or time savings that matter to ordinary users, the marketing pitch shifts from speculative to practical.
For now, however, Dell is acknowledging that we are not there. The AI PC, as conceived in 2024–2025, promised too much, delivered too little, and confused the very customers it was meant to excite. The industry tried to shortcut the normal arc of technology adoption by leading with a buzzword instead of patiently building compelling experiences.
By bringing back XPS and pushing AI into the background of its messaging, Dell is not abandoning that future. It is admitting that the PC market still runs on basics: speed, reliability, design, battery life, and price. AI can—and likely will—enhance all of those. But until consumers can clearly see and feel that enhancement, “AI inside” will remain a detail, not a decision driver.
In that sense, the great AI PC collapse is less an embarrassing failure than a necessary correction. The hype cycle has peaked. What comes next will depend on whether the industry can turn NPUs and AI features from vague promises into concrete, everyday value.
—
