Salesforce Ventures Commits Another $500 Million to Generative AI Fund

Salesforce Ventures, the investment arm of the enterprise technology giant, said Monday it is committing another $500 million to invest in generative AI ventures, bringing the total amount of funding it has provided to AI startups to $1 billion in the past year and a half, Salesforce said in an exclusive statement. Forbes.

The money will go to the company’s Generative AI fund, which debuted in March 2023, a few months after OpenAI’s ChatGPT release kicked off the global AI phenomenon in late 2022. At the time, Salesforce committed $250 million to the fund, then increased that to $500 million three months later. Now, Salesforce is doubling that amount again.

“We went through $250 million really, really quickly,” said John Somorjai, president of Salesforce Ventures. Forbes“In 18 months, we spent all of $500 million.”

With the fund, Salesforce has quietly amassed a portfolio of some of the industry’s biggest players, including Anthropic, Cohere, Mistral and Hugging Face, mostly through later-stage, post-Series A investments. In all, the last $500 million has been spent on two dozen AI companies, Somorjai said. (Other deals haven’t gone so well. Last June, Salesforce also added Humane AI, a beleaguered startup that later released a hardware device called the Ai Pin that was widely criticized, to its portfolio.)

The announcement comes as AI investment has reached eye-watering heights: OpenAI is reportedly in talks to raise about $6.5 billion at a valuation of about $150 billion. Groq, a chip startup focused on inference speed, raised $640 million last month after revenue last year was just $3.4 million. Poolside, which makes AI for writing software, reportedly raised $500 million at a valuation of $3 billion — before even releasing a product.

Salesforce Ventures has already started to field a new $500 million round, but declined to say which companies. The tech giant announced the funding ahead of Dreamforce, the company’s biggest event of the year and its biggest annual conference, in San Francisco.

Salesforce Ventures, founded in 2009, was designed to invest in startups that built integrations with Salesforce products. Early bets included Docusign and Box, now public companies valued at $11.5 billion and $4.8 billion, respectively. Since then, it has invested more than $5 billion, including bets on AI companies before it launched its dedicated Generative AI fund, such as data intelligence platform Databricks (valued at $43 billion).

“This will give us an opportunity to really support entrepreneurs,” Somorjai said. “And really help bring these great AI innovations to market at a scale that allows them to deliver them globally to all of our customers.”

Salesforce founder and CEO Marc Benioff is heavily involved in the deal process, approving any investment above a certain dollar amount, Somorjai said, although he declined to say how big a deal would have to be for Benioff to get involved. Somorjai said Benioff has also met with many of the founders of portfolio companies, including Anthropic CEO Dario Amodei and Cohere CEO Aiden Gomez. The top-down approach is similar to that of Nvidia founder Jensen Huang, who chairs a committee that approves all investments by its VC arm Nventures, the company said. Forbes earlier this year.

Even though Salesforce Ventures has been quick to spend its last half-billion dollars in investment, Somorjai isn’t committing to the same deal-making pace this time around. “When you have a hot company, everyone wants a piece of it,” he said. “We think we provide a lot of differentiated value to the companies we invest in,” including introductions to leaders across Salesforce’s vast customer base.

“So we hope this will help us get larger amounts in some of these rounds,” Somorjai said.