According to MarketandMarkets, the artificial intelligence (AI) market is estimated to grow from $419.7 million in 2014 to $5.05 billion by 2020, growing at a CAGR of 53.65% from 2015 to 2020. The Media and Advertising sector is expected to drive the growth of AI during this period. IBM, Microsoft, and Google are key players in the market, and now Salesforce is trying to make inroads into it.

Salesforce’s Financials

For the first quarter of fiscal 2017, Salesforce’s revenue grew 27% over the year to $1.92 billion, above analyst estimate of $1.89 billion. Net income was $38.8 billion or $0.06 per share. Non GAAP EPS was $0.24, beating analyst forecast of $0.25.

By segment, revenues from Subscription and Support services grew 27% over the year to $1.78 billion. Professional services and other revenues were up 33% to $141 million.

Salesforce ended the quarter with deferred revenue of $4.01 billion, up 43%. Sales Cloud accelerated in the quarter with 15% growth. Service Cloud grew 32% and Marketing Cloud grew 29%. Apps Cloud and others grew 45%.

Salesforce raised its full year guidance. It now expects revenue of $8.16 billion to $8.20 billion and non GAAP EPS of $1.00 to $1.02 compared to its previous guidance of $8.08 billion-$8.12 billion revenue on earnings of $0.99-$1.01. The market was looking for revenues of $8.12 billion and an EPS of $1.01.

Salesforce expects to end the second quarter with revenue of $2.005 billion-$2.015 billion, an increase of 23% y-o-y and non GAAP EPS of $0.24-$0.25. The market had forecast the quarter’s revenues at $1.98 billion and an EPS of $0.25.

Salesforce’s Acquisitions

Salesforce’s recent acquisition spree is skewed towards AI. Early this month, it acquired Israel-based data automation startup Implisit Insights for “tens of millions”. Based on the data stored in its customer database, it helps sales people make faster and better decisions by predicting the best possible deals and identifying those most at risk of losing. It also recommends actions to improve the sales process. It has raised $3.3 million in funding.