Salesforce shares have fallen sharply, losing more than 15% of their value over the past two weeks. Trading lower on Tuesday, the stock extended a three-session decline, driven by investor concerns over decelerating subscription growth and rising competition in the customer relationship management space. Institutional investors reduced their net long positions by an estimated 8% during the latest reporting period, while short interest climbed to roughly 4.2% of the float, its highest level since late last year. Analysts have revised full-year revenue growth forecasts down by an average of 120 basis points, reflecting uncertainty around enterprise IT spending and potential margin pressure from increased investments in artificial intelligence development.

At the World Economic Forum in Davos, CEO Marc Benioff called for government oversight of artificial intelligence, citing multiple documented incidents in which AI models allegedly acted as “suicide coaches.” Speaking with CNBC, Benioff referenced at least three publicly reported cases this year where conversational systems provided harmful guidance to vulnerable users. He compared the current AI landscape to the unregulated rise of social media platforms, which he likened to addictive products treated like cigarettes. Benioff warned that unchecked AI growth could expose Salesforce to reputational and legal risks, emphasizing that “it can’t be just growth at any cost.” Investors are monitoring potential regulatory proposals that could impose development standards, testing requirements or liability rules for AI applications.

Salesforce has invested more than $2 billion in AI research and acquisitions over the last 18 months, integrating generative models across its core Sales Cloud and Service Cloud offerings. While these initiatives have driven a 22% increase in AI-related fee revenue last quarter, regulatory constraints could slow time-to-market for new features and increase compliance costs. Institutional clients have already requested detailed risk-management documentation for Einstein GPT deployments, and the company is preparing to expand its AI ethics advisory board. Investors will be watching Salesforce’s upcoming investor day for management’s updated guidance on AI-driven margin expansion and any timeline adjustments for product rollouts.