Companies used to be wary of replacing their customer service with AI. Now, they are starting to see it as a necessity, said SoundHound AI Inc Chief Executive Keyvan Mohajer.

U.S.-listed shares of the company rose 16% in premarket trading on Friday.

“We are at the inflection point of AI adoption by enterprises,” Mohajer said in an interview. “Every business is going to need an AI transformation.”

The AI voice company more than tripled its revenue for the second quarter, on the back of increased adoption of its voice AI tools by large companies. It also raised its full-year revenue expectations.

“In restaurants we used to knock on their door and try to educate them that AI automation can be beneficial and you would only get maybe some [proof of concept] budget from the more forward-looking ones,” Mohajer said. “But now they are knocking on our doors. It’s not a POC anymore. It’s a mandate.”

However, SoundHound’s quarterly loss widened to $74.7 million, or 19 cents a share, compared with a loss of $37.3 million, or 11 cents a share, a year earlier.

The voice AI company said adjusted earnings were a loss of 3 cents a share. Analysts were expecting a loss of 5 cents, according to FactSet.

SoundHound posted $42.7 million in revenue, up from $13.5 million the year prior. Analysts were expecting revenue of $32.9 million.

The company said it saw new wins from healthcare companies, automotive brands and restaurants including Red Lobster and IHOP.

AI use by businesses has so far been slow because many are wary of adopting error-prone tools that make them lose customers. “Our audience is not forgiving. You cannot be the AI for an enterprise and be 70% right. You have to be 100% right,” Mohajer said.

But now, SoundHound models have technology to solve the “hallucination” problem, in which language models generate false or nonsensical responses, Mohajer said.

The ability to customize large language models to particular businesses gives smaller AI companies like SoundHound a leg up on the tech giants, Mohajer said. “Enterprises need a partner that can sit with them for years to come, listen to them, innovate with them, differentiate for them and help them fix their problems,” Mohajer said. “The list of winners [of the AI revolution] is going to be long and you haven’t even heard of all of them yet.”

SoundHound raised its full-year revenue outlook to be between $160 million and $178 million, up from its previous forecast of $157 million to $177 million. Analysts are expecting $161.2 million.