ServiceNow CEO Bill McDermott pushed back against the idea that artificial intelligence technology will make enterprise software redundant in a Wednesday interview with CNBC’s Jim Cramer.
“We realize the world needs access to the great hyperscalers, and so we integrated with all three of them. So that’s a cooperative,” McDermott said. “The world’s going to benefit from the large language model providers, but they don’t do what we do.”
As AI continues to develop, some on Wall Street are worried that companies will be able to rely solely on automated models — making many enterprise software companies’ products obsolete.
ServiceNow makes software for companies including the National Hockey League, FedEx, Ulta Beauty and AstraZeneca.
McDermott detailed some of the functions of ServiceNow’s platform, including management of assets, operations and security.
ServiceNow’s software is needed to perform complex functions — such as regulatory environment processes for financial services firms with decades-old legacy technology — McDermott suggested. He brushed off specific concerns that systems of record, which store data and information, might be “eaten by AI.”
He indicated that agentic AI isn’t up to the task of entering the “already complex environment.”
“Those agents are being sold into silos, and that’s the very reason why AI won’t work,” McDermott said. “AI is a cross-functional sport.”
McDermott also explained why ServiceNow proposed a five-for-one stock split on Wednesday during earnings.
“I feel strongly that we’re right now ready for more than just institutional investors,” he said. “We know the consumer investor wants in, and I don’t want you to have to buy fractional shares and go through all that.”
ServiceNow topped expectations when it reported after close, and shares jumped more than 4% in extended trading.
