ServiceNow CEO Bill McDermott: Generative AI Could Boost Global GDP By Almost $7 Trillion

‘We see unprecedented parallel (generative AI) adoption across consumer and the enterprise,’ says ServiceNow CEO Bill McDermott. ‘Our platform experts who have worked with the greatest brands in technology believe this moment is as transformative – if not even more so- than the internet or even the iPhone.’

ServiceNow CEO Bill McDermott couldn’t be more bullish about the generative AI opportunity that he says some experts believe could boost global gross domestic product by nearly $7 trillion.

“We see unprecedented parallel (generative AI) adoption across consumer and the enterprise,” said McDermott in a conference call with analysts after the enterprise IT automation leader announced a blockbuster expanded partnership with AI behemoth Nvidia. “Our platform experts who have worked with the greatest brands in technology believe this moment is as transformative – if not even more so- than the internet or even the iPhone.”

McDermott’s comments come with ServiceNow infusing generative AI into all of its ServiceNow workflow offerings. In fact, ServiceNow just announced Wednesday new case summarization and text-to-code generative AI capabilities.

ServiceNow is set to unleash in September a new set of Premium Plus generative AI offerings for IT Service Management, Customer Service Management and Human Resources Service Delivery.

The generative AI revolution has businesses throwing out the old business playbooks and reinventing themselves for the AI era, said McDermott. “This is the entire enchilada as it relates to transforming businesses,” he said. “Generative AI and these LLM models are now putting CEOs in a position where they have to come up with a new playbook.”

C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company which works with ServiceNow and Nvidia, said Advizex and Fulcrum are also seeing a huge sales pipeline for AI solutions.

“I can’t recall a bigger or more impactful opportunity for the channel,” said Howdyshell. “We are making big investments in AI-as-a-service solutions. We expect to be the leader in AI-as-a-service.”

Howdyshell said he sees the new expanded ServiceNow partnership with Nvidia as a sign of stepped up commitment to deliver generative AI solutions through partners. “This is a big commitment by ServiceNow and Nvidia to allow the channel to deliver AI software and services,” he said.

McDermott, for his part, said the ServiceNow-Nvidia partnership along with the new Lighthouse program is aimed at accelerating “value realization” for customers at the “cutting edge” of generative AI.

“This involves our engineers locking arms with Nvidia engineers to co-develop new use cases for the enterprise,” he said. “We already have the most significant pharmaceutical, financial services, manufacturing and healthcare customers engaged with us. Additional customers will become design partners for new AI capabilities in their specific industries. We are currently evaluating a range of customers who are candidates for this program and the interest is continuing to surge. These engagements share one sentiment perfectly in common: the propensity to buy is there even as our underlying growth is already strong… AI represents a market-making tailwind to ServiceNow.”

The stepped-up ServiceNow AI offensive comes with the company posting better-than-expected results for its second fiscal quarter ended June 30.

ServiceNow, which was added to the Fortune 500 during the quarter, reported earnings of $2.37 per share on a 23 percent increase in sales to $2.15 billion. That compares with the Zacks consensus estimate of $2.05 per share on sales of $2.13 billion.

ServiceNow said subscription revenues were up 25 percent in the quarter to $2.07 billion with 70 transactions over $1 million in net new annual contract value (ACV).

The better-than-expected results come with ServiceNow becoming the driving force behind digital transformation for the enterprise, said McDermott.

“We’re lifting people out of soul-crushing work and modernizing these companies with a 21st century platform that is resonating,” he said. “You combine that with LLMs (large language models), the combination of Nvidia and others. I really think this is a once-in-a-generation moment.”