ServiceNow CEO Bill McDermott pushed back against the idea that artificial intelligence technology will make enterprise software redundant in an interview with CNBC’s Jim Cramer on Wednesday.
“We recognized that the world needed access to great hyperscalers, so we integrated with all three companies. So this is a cooperative,” McDermott said. “The world would benefit from large language model providers, but they don’t do what we do.”
As AI continues to develop, some on Wall Street worry that many enterprise software companies’ products will become obsolete as companies can rely solely on automated models.
ServiceNow supports the National Hockey League, fedex, ulta beauty and AstraZeneca.
Mr. McDermott detailed some of the capabilities of the ServiceNow platform, including asset, operations, and security management.
ServiceNow’s software is needed to perform complex functions, such as regulatory environment processes for financial services companies that use decades-old legacy technology, McDermott suggested. He dismissed specific concerns that systems of record that store data and information could be “eaten by AI.”
He said agent-based AI is not up to the task of entering an “already complex environment.”
“These agents are sold into silos, and that’s exactly why AI doesn’t work,” McDermott said. “AI is a cross-sectoral sport.”
McDermott also explained why ServiceNow proposed a 5-for-1 stock split during Wednesday’s earnings call.
“We feel very strongly that we are now ready to accommodate people beyond institutional investors,” he said. “We understand that consumer investors want to invest, but we don’t want them to go through all the hassle of buying fractional shares.”
ServiceNow’s after-hours announcement beat expectations, and its stock rose more than 4% in after-hours trading.
