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Salesforce co-founder Marc Benioff likes to remind those that he's a part-time media mogul. On Wednesday afternoon, the tech billionaire shared some thoughts on OpenAI: “And then they (OpenAI) stole data from quite a lot of firms like Time, Dow Jones, New York Times, and Reddit.”
His tone was comprehensible. Benioff bought the venerable Time magazine for $190 million in 2018. But his larger problem lies in the shopper relationship software that Salesforce focuses on.
Salesforce shares fell a whopping 20 percent on Thursday, causing the corporate to lose around $50 billion in market value. Expected and forecast sales and orders were weaker than expected. Sales within the second quarter are expected to extend by lower than a tenth, a rare single-digit forecast.
But the large issue remains to be artificial intelligence. Corporate IT budgets are limited, and major software firms fear that their customers' resources will probably be diverted to recent, shiny AI products.
In his lengthy comments, Benioff urged observers to take a deep breath and have a look at what he sees as the large picture. Things are usually not as bad as they could appear now. Salesforce's annual revenue has risen from $20 billion to just about $40 billion for the reason that pandemic. Salesforce customers, Benioff said, are still absorbing an enormous amount of latest IT and software they adopted over the past 4 years.
This has distracted customers, not to say Salesforce itself. The software company employed 57,000 people in 2020. That number eventually rose to just about 80,000. After an intensive activist campaign by Elliott Management last yr, the workforce has fallen to just below 70,000.
Elliott had urged Benioff to chop bloated overhead costs and deal with profit margins and returns on capital. At first, the ploy worked. Salesforce shares doubled in 2023, after a disappointing 2022.
But now that the fruits have been picked, that are easy to reap, some existential fears have set in. Like any tech CEO not named Jensen Huang, Benioff insists that his company may even be a giant winner within the AI revolution.
Benioff predicts that despite their clever user interfaces, the AI models will develop into commoditized. Instead, his customers will profit from the Salesforce software. The data it collects for its customers will probably be the actual lifeblood of any AI models that firms wish to use in the long run.
All publishers need to grasp the ability of a compelling narrative. But without delay, not many are buying Benioff's books.
