ServiceNow CEO says AI companies aren’t threatening enterprise software

ServiceNow CEO Bill McDermott pushed back against the idea that AI technology will make enterprise software redundant in an interview with CNBC’s Jim Cramer on Wednesday.

“We recognize that the world needs access to large hyperscalers, and that’s why we’ve integrated with all three. So it’s a cooperative,” McDermott said. “The world will benefit from the big language model providers, but they don’t do what we do.”

As artificial intelligence continues to improve, some on Wall Street worry that companies may rely solely on automated models; This causes the products of many enterprise software companies to become obsolete.

ServiceNow produces software for companies including the National Hockey League. Fedex, Ulta Beauty And AstraZeneca.

McDermott detailed some of the functions of the ServiceNow platform, including asset management, operations, and security.

McDermott argued that ServiceNow software is essential to perform complex functions such as regulatory processes for financial services firms with decades-old technology. He ignored specific concerns that systems of record that store data and information could be “eaten by artificial intelligence.”

The agency said artificial intelligence was not up to the task of penetrating “an already complex environment.”

“These agents are sold into silos, and that’s why AI doesn’t work,” McDermott said. “AI is a cross-functional sport.”

McDermott also explained why ServiceNow proposed a five-for-one stock split during earnings on Wednesday.

“I feel strongly that we are ready for more from institutional investors right now,” he said. “We know the consumer investor wants to participate, and I don’t want you to have to buy fractional shares and go through all that.”

ServiceNow exceeded expectations reported Shares rose more than 4% in extended trading after the close.