Marc Benioff drew upon his roots as a proficient technology salesperson during a compelling earnings call on Wednesday, lasting approximately 30 minutes. He used this platform to critique the AI industry for its challenges with “stolen data,” reliability issues, and notable mishaps.
Benioff expressed his belief that these models lack insight into customer relationships within companies and, at times, fabricate information. By the end of the call, Salesforce’s stock, which initially dropped over 4.5% in after-hours trading, recovered to trade approximately 1% above its initial value. Benioff’s persuasive rhetoric, emphasizing the apparent advantages of Salesforce’s AI products, played a pivotal role in this recovery. Despite a subsequent decline, the stock’s downturn was less pronounced following Benioff’s comments.
During the earnings call, Chief Operating Officer Brian Millham highlighted Amazon clients’ significant interest in AI services, despite Salesforce professionals not anticipating a surge in sales for the upcoming fiscal year.
Salesforce projected revenue for the current year to be in the range of \(37.7 billion to \)38 billion, reflecting an 8% to 9% increase from the previous year. This indicates a slowdown in Salesforce’s revenue growth, which stood at 11% in fiscal 2024, 18% in fiscal 2023, and 25% in fiscal 2022.
Conversely, Salesforce has notably improved its profit margins in recent years through substantial cost reductions in personnel and real estate. Operating margins rose to 14.4% in fiscal 2024 from 3.3% in the prior year, with projected margins of 20.4% for the current year. Additionally, the company announced a 40-cent weekly cash dividend for investors.
Benioff shared instances of businesses, long-time Amazon customers, encountering AI failures after using products from other providers. He referenced a legal dispute involving Air Canada, where the airline had to honor a refund policy due to misinformation provided by a rogue AI source. Benioff underscored the importance of robust data integration for AI to deliver essential insights effectively across various business functions.
Furthermore, Benioff likened Nvidia’s AI chips to indispensable “Levi’s jeans” for contemporary gold miners, specifically mentioning Jensen Huang. He emphasized the value of data and how Salesforce’s product suite empowers businesses to leverage their data effectively for AI applications.
Amidst the AI advancements, Benioff positioned Salesforce as having the premium offering, likening others to mere participants in the gold rush.
