TLDR
- ServiceNow signed a three-year deal with OpenAI to embed AI models directly into its business software platform for IT support, customer service, and operations.
- The agreement includes a revenue commitment from ServiceNow to OpenAI based on customer usage, though financial terms were not disclosed.
- AI agents will perform actual tasks like restarting computers and handling IT issues, not just provide suggestions or chat responses.
- ServiceNow plans to build AI voice agents for customer support using OpenAI’s speech models and computer-use capabilities.
- NOW shares initially dropped 2.94% on Friday but rose over 2% in premarket trading Tuesday after the Wall Street Journal broke the story.
ServiceNow and OpenAI have inked a three-year agreement that puts AI models directly inside ServiceNow’s business software. The deal lets companies use AI agents that complete tasks instead of just offering suggestions.
The partnership covers IT support, customer service, and daily operations. Companies using ServiceNow will access OpenAI’s models through their existing workflows.
Brad Lightcap, OpenAI’s chief operating officer, told the Wall Street Journal that enterprises want OpenAI intelligence applied directly into ServiceNow workflows. He said customers are looking for AI that works like a true teammate.
The deal includes a revenue commitment from ServiceNow to OpenAI. Financial terms were not disclosed. Payments depend on how much customers actually use the OpenAI models inside ServiceNow products.
ServiceNow gains access to advanced AI technology without building large models internally. This saves development time and resources.
What AI Agents Can Do
These AI agents differ from basic chat tools because they take direct action. ServiceNow plans to build AI voice agents for customer support using OpenAI’s speech models.
The company will also use OpenAI’s computer-use model. This lets AI agents operate systems on their own.
They can restart computers or handle basic IT issues without human intervention. Amit Zavery, ServiceNow’s president and chief product officer, explained the models can help companies work with legacy systems like mainframes.
The AI learns how to operate those systems. It then feeds results back into ServiceNow workflows.
Market Reaction and Competition
NOW shares dropped 2.94% on Friday, closing at $127.31. But the stock rose over 2% in premarket trading Tuesday after the Wall Street Journal reported the deal.
Competition in enterprise AI is heating up. Salesforce has added AI agents to its sales and marketing tools.
SAP and Workday are doing the same in finance and HR software. OpenAI is pushing deeper into enterprise markets as it faces rivals like Anthropic, Alphabet, and Microsoft.
Microsoft already offers AI tools across its business software. Alphabet is expanding AI features in its cloud services.
ServiceNow reported a 22% revenue increase in the third quarter. The growth was driven by higher AI use, especially in customer service software.
The company will report its full-year results on January 28. Analysts have a Strong Buy consensus on ServiceNow based on 32 ratings.
The average NOW stock price target is $221.14. This implies a 75.06% upside from the current price.
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