Last week was a tough one for San Francisco’s formerly favorite socially conscious plutocrat.
First, Marc Benioff (opens in new tab)told an out-of-town newspaper (opens in new tab) that President Donald Trump’s stormtroopers should patrol the city’s streets. The Salesforce CEO was miffed that his company needed to deploy 200 or so off-duty cops to protect its 45,000 guests in town for the annual Dreamforce conference, and he reasoned that the National Guard could surely set San Francisco straight.
Then he huffed and puffed to The Standard about all he has done for his hometown, even though he lives in Hawaii now; saw his former pal Ron Conway quit the board of Salesforce’s charitable arm over his comments; and withstood withering criticism from fellow billionaire Laurene Powell Jobs, who accused him of “a kind of moral laundering, where so-called benevolence masks self-interest.”
It ended with Benioff issuing a half-hearted apology for his original comments — a classic sorry-not-sorry statement of regret for “the concern [they] caused” — and rescinding his call for a Trump takeover.
For all that, at least there was a shred of good news. Salesforce pledged to invest $15 billion in San Francisco over the next five years. Surely, that was a positive silver lining to take from an otherwise embarrassing public relations disaster, right?
Wrong.
When you look closer at Benioff’s big investment, it becomes clear that the move was as cartoonishly fake as the forest characters Salesforce uses in its branding. In real life, that $15-billion “investment” isn’t an investment at all, but rather business as usual for Salesforce, which is the city’s largest private employer and has been headquartered here since it was founded in 1999.
Salesforce didn’t go into much detail of how it got to the $15 billion figure in its rah-rah announcement. That’s because it’s pure corporate flim-flam. Company representatives told me the amount represents “headcount, real estate, infrastructure, and investments.” In other words, it is what Salesforce was all set to spend here anyway over the next half a decade for basic stuff like payroll, marketing, and rent.
Another way of thinking about it is this: Salesforce’s annual operating expenses are around $30 billion. Roughly 8,000, or 10%, of its 76,000 worldwide employees are in San Francisco. So San Francisco accounts for about a tenth of operating costs, or $3 billion a year. Multiply that by five years and you get $15 billion. That’s called staying the course, not dramatically upping its game.
In its release, the company said its “investment” would go toward supporting “a new AI Incubator Hub on the Salesforce San Francisco campus, grow the AI ecosystem by investing in workforce development and training, and help companies transform into Agentic Enterprises.”
As a longtime financial journalist who has written about how Benioff and his company use language to mint money (opens in new tab), allow me to parse that statement. There is plenty of empty real estate in Salesforce Tower to host a “hub” for a technology that is key to the company’s future and that it has been pursuing for years. Teaching employees new skills is the everyday work of every decent company. And helping “companies transform into Agentic Enterprises” is marketing speak for “pushing our latest wares to customers.” (“Agentic Enterprises” refers to Salesforce’s fledgling product line to use AI software to replace human customer-service agents with robots.)
Now, there are worse things than Salesforce hyping a pledge about an investment that isn’t an investment. After all, CEOs say the darndest things, recently to curry favor with an easily flattered and increasingly autocratic president. But the notion of a CEO making puffed-up claims to pacify an offended city and its own HQ employees is unique, to say the least.
Compare Salesforce’s proclamation with another one issued by one of his big tech rivals last week. Google also divulged plans for a $15 billion “AI hub” in India, with facilities spread across three campuses (opens in new tab). That is true investment in the future, not just a series of expenditures that maintain the status quo.
None of this is to say that Benioff’s contributions to San Francisco aren’t real (opens in new tab). He and his wife gave another $100 million to a children’s hospital bearing their surname last week. He deserves to brag about these charitable acts, if that’s what he wants to do.
In fact, when I reached him Sunday night by Facetime he professed to be feeling good about the week — and about San Francisco. He didn’t challenge my characterization of the $15 billion in spending. But he pointed to the technological moment as a reason Salesforce is staying put. “We’re more committed to San Francisco than ever,” he said, calling AI momentum a “new gold rush” and insisting that San Francisco is “an important part of the world for us.”
He claimed he asks for nothing in return for his and his company’s generosity. “I don’t get my colonoscopies for free at UCSF,” he joked. And he called Dreamforce “beyond awesome,” adding that “every possible thing that could go right went right, that “there were zero safety incidents,” and that it was an “unbelievably great week.”
It takes a certain kind of magical thinking for anyone to claim that a period in which he was raked over the coals locally and nationally to have been a splendid time. To the extent that he’s being truthful, Benioff means that the week was a success for his company, which carried on with the business of cajoling its customers to keep spending with it, never mind the CEO having stepped in it with his political views.
San Franciscans can hold two truths in their heads at once, that Marc Benioff is good for the city’s commercial life even as his mollycoddling of an autocrat shocks and saddens many of its residents.
But that doesn’t mean we need to be happy about any of it. Especially when he tries to insult our intelligence by trumpeting an investment that is nothing of the sort.