Tech companies launch new generative AI features every day, but it's unclear if anyone is willing to pay for them. One notable example is Salesforce Inc (NYSE:CRM), which has integrated AI tools to craft pitches and automate various tasks. Despite the innovative additions, these efforts have yet to generate much revenue, Bloomberg reports.
Also Read: Salesforce Stock Tumbled, But Many Analysts Maintain Long Term Optimism Despite Q1 Setback, Eye AI Growth
For most big application software companies, AI-related sales will appear on profit-and-loss statements next year or even later. The challenge lies in monetizing these features.
Investors are growing impatient. The iShares Expanded Tech-Software Sector ETF has only gained about 3.5% this year after a 59% jump in 2023.
Most AI spending currently goes toward hardware or cloud infrastructure used to train and deploy models, according to KeyBanc analyst Jackson Ader, per the report. This shift in spending has come at the expense of traditional software vendors like Salesforce, which were prioritized in recent years.
Earlier in June, Salesforce announced the London AI center.
Meanwhile, Salesforce launched its public sector division in India, aiming to tap into the growing market. It also unveiled its digital lending solution tailored to Indian needs.
The IDC study projects that Salesforce and its ecosystem in India will create 1.8 million new jobs and generate $88.6 billion in new revenues from 2022 to 2028, the Business Standard reports.
Salesforce also introduced a digital lending solution designed specifically for the Indian market. The solution integrates banking and financial data with customer data from Salesforce, offering a unified view for loan application processing, leading to faster approvals.
Salesforce stock gained over 11% in the last 12 months. Investors can gain exposure to the stock via Vanguard S&P 500 ETF (NYSE:VOO) and Vanguard Total Stock Market ETF (NYSE:VTI).
Price Action: CRM shares traded higher by 3.95% at $240.96 at the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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