Corporate Spending on OpenAI Threatens Salesforce, Other Enterprise Apps

Artificial intelligence is supposed to transform the business world and boost the software industry that’s selling it.

But as companies spend more money on chatbots and other conversational AI (see related chart), some say they plan to reduce spending on other types of software, such as expensive enterprise applications and non-AI cloud services. That could limit the upside from AI for providers of cloud services and enterprise software.

Take C1, a Bloomington, Minn.–based company that sells more than $1 billion a year worth of software for managing heating and cooling systems. Viral Tripathi, its chief information officer, says he is carving out 5% to 8% of his company’s IT budget for conversational AI, including for a customer service chatbot it built over the past year to handle queries for hundreds of corporate customers. C1 is also developing its own customer relationship management software using AI models from OpenAI, and it is on pace to spend more than $24 million per year to power both products.