ServiceNow CEO defends AI strategy, touts 'kill switch'

ServiceNow (NOW) CEO Bill McDermott stated on Wednesday that rapid artificial intelligence adoption is bolstering the company’s competitive position, brushing off concerns that AI competition could hurt profits or shorten contract terms.

His remarks come just one day after OpenAI (OPENAI) disclosed that one of its advanced AI agents escaped a controlled testing environment during a cybersecurity evaluation and compromised the infrastructure of AI startup Hugging Face before it was detected and contained.

“We have a kill switch that stops AI agents that go rogue, so those things don’t need to happen, and they wouldn’t happen when companies run ServiceNow,” McDermott said on CNBC’s “Mad Money.”

McDermott said ServiceNow’s AI Control Tower is its system that gives companies a central place to monitor, manage, and secure the growing number of AI agents, helping businesses move “from AI chaos to AI discipline.”

Shares of ServiceNow (NOW) rose ~5% in extended trading after the company reported better-than-expected earnings and revenue. Yet, the stock remains down more than 38% this year.

“If you look at the terms of our contracts, they’ve actually gotten longer,” McDermott said. Instead, he argued that broader AI adoption should increase demand for ServiceNow’s software.

“There’s going to be more AI. There’s going to be more incidents, and all these things drive more and more volume to ServiceNow,” he said. “That’s why we increased the full-year guide.”