ServiceNow CEO Bill McDermott: Silicon Valley is getting enterprise AI wrong

Enterprise software has long operated on a relatively stable hierarchy of power: The companies that owned the interface largely owned the customer relationship. Employees moved through dashboards, tabs, forms, and menus; software vendors sold more seats, expanded across departments, and steadily compounded recurring revenue. Agentic AI is beginning to destabilize that model. Increasingly, enterprise users no longer need to navigate software directly to complete routine work. AI agents can coordinate actions across multiple systems through natural-language commands alone. That possibility has rattled the software industry. Earlier this year, SaaS stocks sold off sharply as investors questioned whether AI agents could weaken sticky interfaces, compress seat growth, and erode the economics that powered enterprise software for decades. The question now hanging over the industry is whether AI agents will hollow out enterprise software altogether, or if they’ll reorder where value accrues within it. Few executives have pushed back against that first narrative more aggressively than Bill McDermott, the longtime ServiceNow CEO who argues investors fundamentally misunderstand how enterprise AI will actually get deployed inside large organizations. “AI thinks,” McDermott tells Fast Company. “It’s got tremendous compute power. But it doesn’t act.” That distinction sits at the center of ServiceNow’s broader AI strategy. While many investors worry that hyperscalers and foundation model companies will eventually absorb large portions of enterprise software, McDermott argues the rise of AI is actually increasing the importance of orchestration, workflow governance, and operational execution systems. “When you’re running a company, and you want the digital agents to work with the humans, or even in a lot of cases do the work that the humans are doing, they just have to execute along the lines of the business process so things ac