Salesforce’s New AI Strategy Acknowledges That AI Will Take Over Jobs

(Bloomberg) – Salesforce Inc. is unveiling a pivot in its artificial intelligence strategy this week at its annual Dreamforce conference, now saying its AI tools can handle tasks without human control and changing the way it charges software.

Most Read from Bloomberg

The company is famous for its contribution to the era of software as a service, which involves renting access to computer applications through subscription. But as the introduction of AI shakes up the industry, Salesforce is rethinking its business model for the emerging technology. The software giant will charge $2 for every conversation held by its new “agents” – artificial intelligence built to handle tasks such as customer service or scheduling sales meetings without the need for supervision of man.

The new pricing policy also seeks to protect Salesforce if AI contributes to future job losses and business customers have fewer employees to purchase subscriptions to the company’s software.

Salesforce even relies on the ability to replace employees with new technology. Its new AI agents will allow companies to increase their staffing capacity during busy periods without hiring full-time workers or “gig workers,” CEO Marc Benioff said Tuesday during of the keynote address at the company’s annual Dreamforce conference.

Despite the focus on AI from the beginning of 2023, software developers such as Salesforce, Workday Inc. and ServiceNow Inc. they have nothing to show for their efforts. Revenue and value gains from AI have flowed heavily to hardware makers such as Nvidia Corp. or cloud services such as Oracle Corp.

Many software vendors have introduced AI assistants capable of summarizing or transcribing written content – the most famous of which is Microsoft Corp.’s Copilot. Generally, consumers are not ready to pay for these additional features.

“I think the results that people saw from the copiers didn’t meet their expectations,” said Chief Operating Officer Brian Millham in an interview in late August. “I think the hype was ahead of the first assistant’s results.”

The new version of Salesforce’s AI products is meant to work unsupervised “unlike older copywriters and chatbots that rely on human requests and struggle with complex or multiple tasks,” the company said. For example, publisher John Wiley & Sons Inc. said it was able to boost the number of customer service requests it resolved using Salesforce “agents” without employee interaction.

The story continues

This represents a shift for Salesforce, which until recently has focused on building AI tools that help people. “We have a principle called a person in the loop – we don’t know enough to develop fully autonomous technology,” Patrick Stokes, the company’s director, said in September 2023.

At Dreamforce this week in San Francisco — where 45,000 people are expected to attend in person — the company will make the case for its new strategy. Its business arm also announced a new $500 million fund dedicated to AI startups.

Benioff on Tuesday argued that new AI products will be more accurate and safer because Salesforce already has a large amount of customer data. That is different from what he called “those evil copycats.”

Salesforce’s pivot speaks to one investor’s fear that job losses from AI could hurt the software-as-a-service business model.

One of the main factors of AI is the efficiency of workers. A company using AI tools for customer service will need fewer human agents to serve the same base, for example. But the workforce of slow-growing businesses will dampen revenue growth for software companies, which charge more based on the number of employees allowed to use the products. Wall Street analysts have used recent earnings calls that align with the software company’s management teams on this risk.

By pricing its new AI features based on results rather than the number of employees using them, Salesforce is protecting itself from undercutting customers.

Millham, the COO, gave the example of a 5,000-person call center that required 30% fewer employees within five years. Others may choose to hire a few more, he added.

“We like to think, ‘Let’s get creative and step people up and do a really complicated job,'” Millham said. “But there are companies that are looking at it through the lens of — ‘Hey, I think AI can do a lot of human work today.’

(Updates with the CEO’s comments starting in the fourth paragraph.)

Best Reads from Bloomberg Businessweek

©2024 Bloomberg LP