Salesforce continues to double down on AI – literally this time. Ahead of the company’s annual Dreamforce conference, Salesforce revealed it is dedicating an additional $500 million to its corporate venture fund, Salesforce Ventures. This new investment brings the fund’s total capital for AI ventures to a staggering total of $1 billion.
Salesforce Ventures has been an arm of the tech giant’s long-term growth strategy, identifying and supporting startups with AI capabilities. The latest funding round will focus specifically on companies developing smaller, more targeted AI models, which are designed to offer specialized solutions to businesses and are tailored to specific industries or use cases. Salesforce Ventures has been instrumental in helping early-stage AI companies grow and thrive, a trend that will continue with this latest funding boost. Since its establishment in 2009, the venture arm has invested over $5 billion in various technology startups, including several AI-focused firms. Its portfolio includes key players such as Hugging Face, Cohere, and Anthropic, all of which have made significant contributions to advancing AI technologies.
The new $500 million injection comes just a few months after Salesforce doubled its AI fund to $500 million in June 2023, from an initial $250 million set aside earlier in the year. In August 2023, for example, AI startups raised approximately $4.3 billion in venture capital, accounting for nearly a quarter of all funding in the sector.
This new fund also comes at a time when the competitive landscape for AI investments is intensifying, with valuations for AI startups remaining high. Salesforce Ventures, like many other venture capital firms, is seeking to invest in these startups as early as possible to avoid soaring valuations. The fund has already deployed its initial $500 million across 24 companies, including Hugging Face, Mistral, and Cohere. By targeting companies in the earlier stages of development, Salesforce Ventures aims to secure stakes in high-potential firms before valuations clock a rise.
Unlike some of its competitors, Salesforce Ventures is placing a deliberate focus on smaller, verticalized AI models. These models are tailored to specific industries, offering businesses case-specific applications that can deliver more precise and reliable outcomes. According to John Somorjai, Salesforce’s Chief of Corporate Development and Investments, these smaller models have the potential to transform business operations across sectors, providing companies with the tools they need to adopt AI solutions at scale. This comes at a time when there is a growing demand for models that can deliver highly customized solutions tailored to individual business needs.
“Salesforce Ventures is a leader in helping startups scale market-changing innovations in the cloud, and we’re expanding on that heritage to bring the power of AI to all parts of the enterprise,” Somorjai said. “The first $500 million we invested in this technology has powered growth across our AI ecosystem, and we’ll continue to incorporate learnings from across our business, partners, and customers to help build the AI leaders of tomorrow.”
