The News: C3.ai, the enterprise AI software company founded by tech entrepreneur Tom Siebel, opened for trading on the New York Stock Exchange Wednesday morning at $100 per share. The first trade valued the company more than 100% above its IPO pricing in another big Wall Street debut amid a frenzied IPO market that also included the mega deal for DoorDash on Wednesday. Read the news story on CNBC.
Analyst Take: Over the past few months, I have been outspoken about the role I expect machine learning and AI to play in driving enterprise digital transformation. Not an overly difficult assertion based upon the growing investment that companies are making in cloud, big data, analytics, and enterprise software.
However, I have also noticed an aggressive pattern within the technology space to deliver more industry-centric solutions to enable the enterprise to handle the complexities of vast data sprawl, structured and unstructured data sets, data warehousing and management requirements, and schema uniformity. In short, the goal of deploying AI on top of a dataset quickly has significant complexities that have a wide variety of technology options to address, but in my opinion, most are quite intensive, and enterprises are looking for a better option.
C3.ai caught my attention upon announcing its broad partnership with leading enterprise software companies, Microsoft and Adobe. Given that both companies offer a wide swath of AI and ML-driven solutions, it became immediately apparent that if these companies see the value in a deeper partnership with C3.ai, there must be something significant under the hood. After a relatively short briefing from the three companies, it quickly became evident that C3.ai is building a set of tools that shortens the cycle from data to value for industry-specific AI use cases. Taking data from within a companies IT resources and beyond to support a wide variety of verticals from Oil and Gas to Financial Services and more.
This has been a focus area of many leading enterprise software companies, from Oracle to SAP to Salesforce. All of which have seen varying levels of success, but for me, I like the idea of a partner in C3.ai that layers on top of these enterprise platforms to short circuit ambitions to deploy AI at scale.
Today’s IPO of C3.ai didn’t only see a rapid rise that led to more than 100% share price gains from the open, but it was an indicator of the market’s bullish sentiment about C3.ai and its trajectory. While there will certainly be continued advancements in the enterprise software space to streamline industry-based AI, I think the overall TAM is still in its infancy, and the need for many enterprises to be able to apply AI/ML at scale is going to grow rapidly. C3.ai can be a partner to many leading software players and enterprises in making that possible. It’s a well-positioned technology coming to market at a moment of need. Precisely why I’m bullish and not at all surprised by the big gains on its IPO.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.
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Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio