Salesforce Stock Slides 30% on AI Marketing Claims

A gap between marketing promises and product reality for Salesforce Inc.’s flagship AI offering is fueling investor concern, contributing to a 30% stock slide this year as the company fights to maintain its leadership against a wave of software disruption. A Bloomberg report alleges the company showcased AI capabilities for major clients that were not yet functional.

"We have marketed every technology that we have brought to market, forward-looking, and we've always delivered," Chief Executive Officer Marc Benioff said in an interview, defending the company's long-standing practice of demonstrating future products.

The report, published Friday, found that key features presented in high-profile demonstrations for clients including Williams-Sonoma Inc., Finnair Oyj, and the University of Chicago Medicine were not in use. An AI-powered voice system for the home goods retailer remains unconnected, while an automated flight-rescheduling feature for the airline is explicitly labeled as a "future plan" on its website. A rollout at the hospital system has been delayed by technical and compliance issues.

The issue strikes at the heart of Salesforce's current challenge. With annual revenue growth slowing to 10% from 25% in fiscal 2022, the company has staked its future on AI. Its Agentforce product has an $800 million annual revenue run rate from 29,000 contracts, but the controversy raises questions about its ability to defend its turf from AI-native rivals and satisfy a market hungry for genuine artificial intelligence.

While the most ambitious functions remain aspirational, Agentforce has found traction in simpler, information-focused tasks. Appliance maker SharkNinja reported a 20% drop in service calls after implementing the AI for automated troubleshooting. Similarly, the city of Kyle, Texas, doubled its annual Salesforce spending to $300,000 to use the system for handling resident complaints.

Still, the gap between vision and reality underscores a core industry anxiety. "People are worried that the AI is going to give a refund in the middle of the night or that it's going to create a huge bill," said Rebecca Wettemann, a software industry analyst, pointing to corporate reluctance to grant AI autonomy over high-value operations.

In response, Salesforce is adjusting its strategy. The company is now offering customers free or heavily discounted support, acquired data-integration firm Informatica for $8 billion to ease AI deployment, and has begun tying sales compensation to customer usage of Agentforce, not just contract signings. The moves signal a recognition that turning AI promises into profit requires more than just a good sales pitch.

This article is for informational purposes only and does not constitute investment advice.