Artificial intelligence (AI) is transforming the way companies operate. But while much of the spotlight has been on consumer applications like ChatGPT, a quieter -- and potentially more lucrative -- revolution is unfolding behind the scenes: enterprise AI.
C3.ai (AI -5.08%) is one of the few publicly traded companies positioned squarely in this space. It offers a specialized platform to help large organizations build, deploy, and scale AI applications tailored to their business needs. With big-name customers and a first-mover advantage, the company has captured the attention of investors.
But is it the best way to play the enterprise AI boom? Let's break it down.
Image source: Getty Images.
What is enterprise AI -- and why it matters
Enterprise AI refers to the application of artificial intelligence in business operations, encompassing functions such as supply chain management, customer service, cybersecurity, fraud detection, and other related areas. Unlike consumer AI, which targets individual users, enterprise AI helps companies automate processes, make data-driven decisions, and boost productivity at scale.
The enterprise AI is no small market. According to a study by International Data Corp., global enterprise AI spending is expected to reach $423 billion by 2027, driven by demand across various sectors, including manufacturing, energy, healthcare, and finance. McKinsey estimates that AI could generate up to $4.4 trillion in added productivity growth, with enterprise use cases accounting for a significant portion of that.
In short, this is a massive and rapidly growing space, and we're still in the early stages.
How C3.ai fits into the picture
Founded in 2009 by Thomas Siebel, C3.ai's core purpose has always been to deliver AI solutions to enterprises. Its value proposition lies in its three major platforms -- C3 Agentic AI Platform, C3 AI Applications, and C3 Generative AI.
The C3 Agentic AI Platform is a development suite that enables organizations to build, deploy, and manage large-scale AI applications rapidly. Enterprises can also rely on C3 AI Applications -- prebuilt, industry-specific solutions -- for industries such as energy, manufacturing, aerospace, and defense, to accelerate their AI transformations further.
What sets C3.ai apart is its focus on heavy, regulated industries, such as defense, oil and gas, utilities, and manufacturing, partnering with major companies like Baker Hughes and Shell to build industry-specific AI solutions. Unlike newcomers who have little domain knowledge, C3.ai's AI tools are built with a specific purpose, catering to the complex operational needs of large enterprises in these sectors.
With C3.ai's deep domain understanding, it is positioned to leverage any new AI technology and scale faster in the future. For instance, it introduced its third platform, C3 Generative AI, a library of domain-specific, agentic AI applications that allow employees to interact with enterprise systems.
These solutions position the company for expansion in the years to come, even after it delivered its record year in fiscal 2025 (year ended March 31, 2025), when revenue rose 25% to $389.1 million.
In other words, it's not just chasing the hype like many AI companies; it's building the infrastructure for enterprise AI!
What risks should investors watch?
Despite its strategic positioning, riding the massive AI tailwind, C3.ai faces two significant risks: cash burn and competition.
The company remains unprofitable. In fiscal 2025, it posted a net loss of $289 million. Although it has a solid cash balance of over $700 million, sustained losses could still pose a significant problem as it doubles down on investments to grow market share.
The silver lining is that revenue is ramping up quickly, so if the AI company can maintain a lean cost structure, it stands a good chance of reducing its losses and achieving a break-even point. Still, this could be a few years down the road.
Then there's competition. Enterprise AI is heating up fast. Cloud giants like Microsoft (via Azure and OpenAI), Amazon (via Bedrock), and Oracle are embedding AI into their platforms. Many existing C3.ai customers may eventually prefer bundling AI solutions directly through their cloud providers -- a significant risk to C3.ai's long-term expansion. And let's not forget the elephant in the room for enterprise AI, Palantir Technologies, which will forever be a head-on competitor for C3.ai.
Fortunately, the AI market is vast and growing, providing sufficient room for multiple players to succeed. Still, investors should track how C3.ai performs compared to its peers in the coming quarters.
What does it mean for investors?
C3.ai is a high-risk, high-reward play on enterprise AI.
Its platform and early customer base provide a solid foundation. If management executes well, C3.ai could become a key enabler of the AI transformation happening across global enterprises.
The downside is that the path to profitability remains uncertain, and competition is intensifying rapidly.
For investors bullish on the enterprise AI trend, C3.ai is one of the most direct public vehicles available. Be prepared for volatility, though, and keep a close eye on the company's performance moving forward.
