Friday 2 June 2023

How Generative AI is Unfavorable for Salesforce Stock (NYSE: CRM)

Salesforce’s AI Strategy: Challenges and Opportunities

Salesforce, a leading provider of customer relationship management software solutions, has been grappling with tepid growth amid deteriorating macroeconomic conditions and intense competition in the IT industry. The company’s AI bet, which initially paid off with the launch of the Einstein AI Platform in 2021, has not been enough to drive reacceleration in recent quarters. Furthermore, the company’s lagging top-line guidance for fiscal 2024 is drawing questions on whether management is doing enough to ensure ongoing optimization efforts will not compromise market share gains.

However, Salesforce’s foray into generative AI presents a significant opportunity to deepen its market share gains across the healthcare and life sciences industry, underscoring the technology’s increasingly mission-critical role in supporting relevant applications. By incorporating OpenAI’s GPT models, Salesforce has launched “Einstein GPT,” which tailors GPT technology for CRM applications. While the technology’s benefits for novice workers’ productivity are evident, the company must remain mindful of recent observations of lengthened deal cycles, deal compression, and focus on “fast time-to-value wins” among its customer base and persistently deteriorating macroeconomic conditions.

To mitigate future reliance on third-party models, Salesforce has developed proprietary LLMs, including ProGen and CodeGen, for addressing challenges in human disease and the environment, respectively. ProGen is already being used to identify potential treatments for neurological and autoimmune disorders, while CodeGen is designed to automate repetitive coding tasks to enhance productivity.

Salesforce’s GPT trust layer, a differentiated factor in its AI-enabled CRM solutions amongst competitors, enables customers to use LLMs crucial in building generative AI-enabled CRM solutions without the need to move or store their data in the model, providing a secure and trusted experience critical in the enterprise environment.

Despite the challenges facing Salesforce, every CEO and every CIO sees AI as a revolution beginning and ending with the customer, wants more productivity, and more intelligence through using AI in the data-driven era. Salesforce has the experience and the expertise to capitalize on these opportunities with its AI strategy.

Editor Notes

Salesforce’s AI strategy presents both challenges and opportunities. While the company has struggled in recent quarters amid deteriorating macroeconomic conditions and intense competition, its foray into generative AI and the development of proprietary LLMs presents significant opportunities to deepen its market share gains across relevant industries. As Salesforce continues to optimize its AI efforts, it remains well-positioned to capitalize on growing enterprise demand for no- to low-code techniques to improve productivity in the data-driven era.

If you’re interested in learning more about AI and the latest developments in the IT industry, be sure to check out GPT News Room. GPT News Room is the leading source for news, stories, and analysis on AI, machine learning, and other cutting-edge technologies.

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