Salesforce (CRM) co-founder, chairman and CEO Marc Benioff and his Ohana (as Benioff affectionately calls Salesforce employees) are getting ready to ride the next wave of artificial intelligence.
“We’ve seen a lot of exciting waves of technology in our industry — cloud, social, mobile — but this AI wave will be the biggest ever,” Benioff said on Yahoo Finance Live (video above). Salesforce’s “AI Day” this week in New York City. “I think the success of OpenAI is testament to the fact that it is one of the fastest growing trends not only in the consumer market but in the enterprise market.”
Salesforce is wasting no time diving deeper into generative AI as it seeks to keep its business ahead of rivals.
The company introduced “AI Cloud” at a crowdsourced event. Salesforce says that its AI Cloud product will allow marketers to auto-generate code for customers and developers to use, among other use cases.
Salesforce CEO Marc Benioff talks AI in front of a packed house of analysts, investors and media in New York City on Monday.
Another key component of the new product is preventing large language models from maintaining sensitive customer data. This element is meant to address growing concerns within businesses of generative AI going too far with leveraging customer data.
New research from Salesforce has revealed that 73% of employees believe that generative AI introduces new security risks. Nearly 60% of people who plan to use technology do not know how to keep data secure.
Salesforce employees also showed off AI functions coming to the workplace collaboration platform Slack. Most of Salesforce’s new AI suite will roll out in the coming months.
“The amount of data that we already see entering the systems of our data cloud is at a record level,” Benioff said. “So I think that’s an indication of how well these generative AI systems will do.”
Benioff quickly dispelled any notion that Salesforce would have difficulty monetizing its new AI, which has been a concern in some Wall Street circles.
“We introduced all kinds of new monetization models around generative AI, including our AI Cloud, which is our starter package to help customers grow,” Benioff said. “It’s $360,000. It gives you all the licenses and capabilities and services to move forward.”
Wall Street is hoping next-generation AI will unlock new growth for Salesforce as its stock is up 61% year-to-date despite a sluggish economy.
“We walk away from Salesforce’s AI day with a positive outlook on the messaging of an integrated data/infra data stack as well as the privacy/trust angle,” Citi analyst Tyler Radke wrote in a research note. “At the same time, we believe GenAI’s monetization is early, and may be far more than other large-cap peers, with pricing still evolving.”
But even with the promise of new AI products, investor attention remains focused on Salesforce’s near-term outlook amid cautious spending among customers.
Several weeks ago Salesforce reiterated its full-year sales outlook, calling for a longer period of time to close deals.
CEO Marc Benioff waves during a keynote address at Dreamforce, the Salesforce.com annual user group meeting, in San Francisco. (Photo by Kim Kulish/Corbis via Getty Images)
Salesforce shares have declined slightly since that muted outlook on May 31. The S&P 500 is up 2.4% during the same time frame.
The outlook comes after a more upbeat quarter from Salesforce a few months ago as the company withstood an active investor onslaught, cut costs to improve margins and promoted new AI initiatives.
“Better than expected, but a challenging sign of the future,” Guggenheim analyst John Defucci wrote in a research note at the time.
Brian Sozzi is the executive editor of Yahoo Finance. Follow Sozy on Twitter @BrianSozzi and on LinkedIn, Tips on banking crisis? Email [email protected]
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