Salesforce is reaping the benefits of Benioff’s AI free-riding
The software giant has one key thing in common with DeepSeek AI.
What do Marc Benioff and Liang Wenfeng have in common?
Both the Salesforce CEO and hedge fund manager who founded DeepSeek are reportedly piggybacking off the billions in capital spending by US tech giants, to great success.
The top lesson from the quick rise to prominence of DeepSeek AI and its alleged tiny training costs is that “hardware is no longer the magic bullet,” per Deutsche Bank analysts Adrian Cox and Galina Pozdnyakova.
DeepSeek was able to stand on the shoulders of giants, training its models off of data generated by preexisting large language models.
Benioff was riding their wave of spending, too, and today’s big advance in shares of software giant Salesforce is another tacit endorsement of his approach to AI.
“I’m going to take advantage of their spending to make my products better and lower cost and easier for my customers,” Benioff said on a podcast released in December. “Also we tend to use other people’s data centers, so we will use Amazon and Google and others and not rely on too much of our own hardware — although we have some, it’s not our philosophy."
He added that the industry’s spending on AI hardware was “excessive” and “a race to the bottom.”
This free-riding (more accurately, rent-riding) has already seemingly worked wonders for Salesforce operationally, which was up double digits after its last earnings report showed that the company’s prowess in agentic AI was so strong as to spur the hiring of 1,400 account executives to sell the software.
It’s a more negative picture for other companies that surged on the perception that they were doing “AI on the cheap” (relatively speaking). AppLovin, Palantir, and SoundHound AI are all getting crushed.
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