(Bloomberg) -- Salesforce Inc. is elevating new generative artificial intelligence features in its products and doubling its investment in AI startups as the company banks on the emerging technology to help resuscitate sales growth.
The software maker’s venture capital fund focused on generative AI will increase to $500 million from the initial $250 million announced in March, the company said Monday in a statement. In addition, its portfolio of artificial intelligence tools will now be called AI Cloud, putting it on par with other major product lines such as Sales Cloud and Service Cloud.
All the major technology companies are embracing generative AI and trying to add new tools after the introduction of OpenAI’s ChatGPT spurred intense interest from businesses across a swath of industries. Ahead of a Salesforce event focused on AI, the company is unveiling security standards for its technology, including preventing large language models from being trained on customer data.
“Every client we talk to, this has been their biggest concern,” said Adam Caplan, senior vice president of AI, of the potential for confidential information to leak through the use of these models.
Large language models are programmed to learn through trial-and-error using massive amounts of text and data. A type of these models is used for generative AI, which creates text and images from a user’s conversational prompts.
After a difficult six months that included job cuts, executive departures and public pressure from activist investors, Salesforce has been winning back the faith of many shareholders, and the stock had jumped 62% this year through Friday’s close. Investors, however, are concerned about sales growth — particularly after the company on May 31 projected revenue in the current quarter would gain 10% from a year earlier. That would be the slowest jump on record and a significant dropoff from a time when 30% increases were routine.
Executives have talked up the potential for AI to drive expansion. Like cloud computing and mobile apps before it, generative AI “is going to spark a massive new tech buying cycle,” Chief Executive Officer Marc Benioff said during an earnings call after the recent results. Underlining the company’s decision to prioritize AI is the decision last month to name Clara Shih as CEO of Salesforce AI. Shih once led Salesforce’s most lucrative product segment Service Cloud.
Customers will pay additional fees to use the new generative AI features across the company’s suite of software, Caplan said. Salesforce is still testing pricing levels, including whether it should be based on flat-rate subscriptions or use, he said. The AI tools will become generally available in products for sales and customer support this summer before being rolled out across the portfolio in coming months, the company said.
Salesforce had previously introduced some generative AI tools using OpenAI’s technology, including a chatbot for its Slack business communication unit and for tasks such as drafting customer service responses.
Bloomberg Intelligence analysts estimated earlier this month that generative AI may produce $1.3 trillion in sales of hardware, software, services and other tools by 2032.
Caplan previously oversaw Salesforce’s Web3, or blockchain and cryptocurrency-related initiatives. He said the applications for generative AI are much clearer than Web3 and customers have expressed massive interest.
Salesforce’s access to large amounts of customer data may be an ingredient for success in the new, highly hyped technology, Brad Zelnick, an analyst at Deutsche Bank, wrote Friday in a note to investors. “We see leading platforms such as Salesforce — with troves of trusted, high-quality data, connected processes, strong brands, distribution and ecosystems — as the natural winners in a generative AI world.”