ServiceNow CEO Bill McDermott is making a bold statement about AI’s impact on enterprise software by significantly increasing his personal financial stake in the company and committing to lead through 2030. Despite the company consistently beating Wall Street expectations with strong revenue and profit growth, ServiceNow’s stock has plummeted approximately 40% since early 2025 due to investor fears that generative AI could replace traditional corporate software solutions.
McDermott is pushing back against this narrative with concrete actions. He recently restructured his executive compensation package to tie his future pay more closely to ServiceNow’s stock performance over the next three years, effectively putting more of his own money on the line. “We’re building a trillion-dollar company here,” McDermott told Business Insider, expressing confidence that the AI threat has been overblown.
The company reported another quarter of revenue and profit that exceeded Wall Street expectations on Wednesday, while simultaneously announcing a new partnership with AI startup Anthropic. This strategic move demonstrates ServiceNow’s approach of embracing AI technology rather than being disrupted by it. To further signal confidence, the company’s board approved a $5 billion share repurchase program, with McDermott committing to deploy approximately $2 billion in stock buybacks within the coming weeks.
McDermott argues that ServiceNow’s financial performance contradicts the doom-and-gloom AI replacement narrative. “The revenue growth is there. The free cash flow and operating margins are accelerating,” he emphasized. The CEO believes the market has unfairly punished ServiceNow’s valuation despite strong fundamentals, stating: “We deserve a higher multiple, and we will get it back.”
The executive’s commitment to remain as CEO through the end of 2030 provides additional stability and long-term vision for the company during a period of significant technological transformation in the enterprise software sector. This extended tenure commitment, combined with his restructured compensation and the aggressive stock buyback program, represents one of the most forceful responses by a major software company CEO to Wall Street’s AI disruption concerns.
Key Quotes
We’re building a trillion-dollar company here
ServiceNow CEO Bill McDermott made this bold declaration to Business Insider, expressing his confidence in the company’s long-term value despite a 40% stock decline driven by AI disruption fears. This statement underscores his belief that the market has significantly undervalued the company.
Through my own compensation, I’m betting on the stock
McDermott explained how he restructured his executive pay package to tie his compensation more closely to ServiceNow’s stock performance over the next three years. This personal financial commitment demonstrates his conviction that AI won’t destroy the enterprise software business model.
The revenue growth is there. The free cash flow and operating margins are accelerating. We deserve a higher multiple, and we will get it back.
McDermott argued that ServiceNow’s strong financial fundamentals contradict the market’s pessimistic AI disruption narrative. He believes the company’s valuation will recover as investors recognize that AI fears have been overblown and the business continues to perform well.
Our Take
McDermott’s aggressive stance represents a fascinating test case for the entire enterprise software industry’s AI anxiety. The 40% stock decline despite strong fundamentals suggests the market may be pricing in an existential threat that hasn’t materialized. His decision to partner with Anthropic rather than fight AI is strategically savvy—it positions ServiceNow as an AI-enabled platform rather than an AI victim. However, the real question is whether traditional workflow automation software can maintain its value proposition when AI agents might eventually handle these tasks more efficiently. McDermott’s willingness to tie his personal wealth and six-year commitment to this bet makes this one of the most consequential leadership decisions in the AI era. If he’s right, it could trigger a major revaluation of enterprise software stocks; if he’s wrong, it becomes a cautionary tale about underestimating AI’s disruptive potential.
Why This Matters
This story represents a critical inflection point in how enterprise software companies are responding to AI disruption fears. ServiceNow’s 40% stock decline despite strong financial performance illustrates the broader market anxiety about generative AI’s potential to replace traditional software solutions. McDermott’s aggressive response—tying his compensation to stock performance, committing to a six-year tenure, and executing a massive buyback—signals that major software executives believe the AI replacement threat is overblown.
The partnership with Anthropic is particularly significant, showing that successful software companies are choosing to integrate AI capabilities rather than be displaced by them. This “if you can’t beat them, join them” strategy may become the blueprint for the enterprise software industry. For investors, this raises important questions about whether the market has overreacted to AI disruption risks. For businesses and workers, it suggests that AI will augment rather than replace enterprise software platforms. The outcome of ServiceNow’s bet will likely influence how other software companies position themselves in the AI era and could reshape investor sentiment toward the entire sector.
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Source: https://www.businessinsider.com/servicenow-ceo-buys-his-own-stock-commits-stay-2030-2026-1