Salesforce has a game plan to compete in big tech’s generative AI race.
The software giant’s VC arm, Salesforce Ventures, has launched a $250 million fund dedicated to investing in generative AI startups. The move follows Microsoft‘s $10 billion investment into OpenAI and Alphabet‘s launch of generative AI chatbot Bard.
The fund coincides with Salesforce’s rollout of Einstein GPT, a generative AI tool for customer-relationship management. To start, the firm will invest in Anthropic, a generative AI startup founded by former OpenAI employees; You.com, a search engine leveraging AI; Cohere, a computer language model training startup; and Hearth.AI, a generative AI startup emerging from stealth.
Salesforce has placed extra emphasis on developing what it calls responsible and ethical AI, concerns that have dominated the conversation in recent weeks. Microsoft’s debut of Bing search powered by ChatGPT went off the rails in several well-publicized mishaps—including when the chatbot declared its love for a New York Times reporter.
This focus on ethics will only become more important as investment in AI grows, according to PitchBook analyst Brendan Burke.
“Startups prioritizing ethical AI from square one can stand out in the rapidly evolving AI platform field,” said Burke. “‘Don’t be evil’ remains an important principle for the current wave of technology development as it was for Google during the birth of search.”
The fund is Salesforce Ventures’ largest by a wide margin. Over the past decade, the firm has raised more than a dozen funds, ranging in size from $50 million to $125 million. In 2017 it raised $50 million for an AI Innovation fund to support its Einstein AI tool set.
“Salesforce Ventures has served as a kingmaker for enterprise SaaS unicorns—given its significant deal sizes and strategic value—and may continue to do so for AI research labs,” said Burke.
Salesforce Ventures has participated in 140 VC deals for AI and machine learning startups, representing about 19% of its total investments to date, according to PitchBook data. Salesforce says it has identified several areas where AI is remaking the sales landscape: AI insights for sales, natural language chatbots for service requests, targeted marketing content and personalized ecommerce experiences.
The firm has been the second-most active corporate VC in recent years, with 436 investments since 2018. Only Alphabet’s GV has made more startup bets in that time.
Salesforce Ventures typically invests in enterprise cloud startups. Leading up to its IPO, the firm invested heavily in cloud data company Snowflake.
The new fund comes as Salesforce has made layoffs, cutting 10% of its total workforce in January.
Featured image by Sundry Photography/Shutterstock
