Top-ranking business executives are committed to generative AI models and the efficiency and revenue growth expected from adoption. ServiceNow (NOW) CEO Bill McDermott joins Yahoo Finance's Julie Hyman and Brian Sozzi from the World Economic Forum in Davos, Switzerland to explain the AI use cases for ServiceNow's platform and how businesses are viewing artificial intelligence as a long-term innovator.

"But I am worried if people don't go for this move now, and don't get in front of this, I truly believe that businesses will suffer," McDermott says on the AI's function as a job-creator. Among fears of job less or skills becoming outdated, McDermott goes so far as to say "CEOs [also] need to be retooled and reskilled — this is the era of the agile CEO."

It's all part of Yahoo Finance's exclusive coverage from the World Economic Forum in Davos, Switzerland, where our team will speak to top decision-makers as well as preeminent leaders in business, finance, and politics about the world’s most pressing issues and priorities for the coming year.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

BRIAN SOZZI: So much AI talk here at the World Economic Forum, so little time to talk about it all. So let's get more on all things AI with ServiceNow CEO, Bill McDermott. Bill, good to talk to you in person for a change. You usually come remote from somewhere.

BILL MCDERMOTT: Great to be with you, Brian and Julie. Thank you.

BRIAN SOZZI: So what has surprised you about all this AI discussion here at the conference?

BILL MCDERMOTT: Business transformation. These CEOs that are here know that they're investing heavily in technology because generative AI, in particular, can give them an outcome. So it's not technology for technology's sake. This year $5 trillion will be spent on technology, most of it on software and services. And Gen AI is the moment in which the CEOs are no longer thinking about investing, they know they have to invest, because if they don't and their competitor does, they may not be around too long.

And this has been well-documented. There were 1,200 CEOs surveyed. The question was, will you invest in Gen AI to which 1,200 replied and said yes. 71% of them said we would raise capital from other areas, or, or simply get a loan before we would not invest in Gen AI. So there's a very serious commitment to it because it can deliver an outcome.

JULIE HYMAN: I got to say, Bill, I'm a little confused. Because we have some people we've talked to have said, it's still early days in AI. We want to move carefully and deliberately. We've other people-- like yourself who say, it's-- you have to, for competitive reasons, you have to invest in it.

You have people who say, that it's not really being deployed that much. Yet there's others who say I'm using it in my business already. So I don't know. I'm a little turned around. [CHUCKLES]

BILL MCDERMOTT: Yeah, and it's understandable that you are, Julie. That's because a lot of people are talking about marketing-- brochures, the future. We're talking about ServiceNow's platform now. We have domain-specific LLMs which means that we build the LLM to the customer's industry. We build the use case based on, is it an IT use case, an employee experience, customer or creator use case. And now you have that on one platform with one architecture and one data model.

So we already have the products. We released Vancouver, which was our big AI release in September on the 29. On the 30th we had one day to take orders, and we had four mega orders. And the momentum for our AI has continued. Why? Because it works and it's going to make people more productive. 35% to 40% more productive in all the use cases that we have. We have 15 of them within ServiceNow right now, delivering 35, 40, and 50 in some cases.

So this is productivity on steroids. But it's also making people happy. We give them a virtual agent which answers questions for them in natural language. We set it up in 15 minutes. So this is a completely different architecture, entirely new idea, and I'm unaware of another platform in the world that does what ServiceNow does. So that's why I'm so optimistic and so certain because we're taking orders.

JULIE HYMAN: Yeah.

BRIAN SOZZI: What are your biggest concerns around AI?

BILL MCDERMOTT: Well my biggest concern around AI is that we don't move quickly enough to put more and more innovation into the platform. And I don't have to worry too much because I have the best engineering team in the business. For us, because we're in command and control of our own destiny, I'm not worried.

But I am worried if people don't go for this move now, and don't get in front of this, I truly believe that businesses will suffer. You know, a lot of people talk about jobs. Time Magazine put out an article in 1966 that AI would cost people jobs. In fact, computers would take 90% of the jobs, and the states would have to subsidize their livelihood to keep them sustainable.

90 million jobs later, technology is still the baseline for value creation, job creation, and momentum. So technology is the forefront of everything. You've got to move on it, you've got to move on it now. And it's for people's benefit. You know, we'll retool, reskill 6 out of 10 people. And that's going to happen. Guess what? CEOs need to be retooled and reskilled. This is the era of the agile CEO.

I have a company that can close its books two days before the end of the quarter. That's because we're running the company on the ServiceNow platform. We're completely agile. Everything is transparent in real time. And we know exactly where we stand minute to minute. That's the future. That's what it has to be.

JULIE HYMAN: Bill, on the flip side, if you look at the potential regulation of AI, earlier Brian talked to Mark Benioff and made the parallel with social media, which was not really regulated at all at the time, and now trying to catch up. And he-- I won't repeat what he said.

BRIAN SOZZI: Choice words.

JULIE HYMAN: Choice words for how it has been. But if you look at AI in parallel, don't we need to get out ahead of it and figure out some guardrails around it, so you don't have these unforeseen consequences?

BILL MCDERMOTT: I want to just differentiate the two environments. I'm talking about the business environment, where the customers using their own data, on our platform, and that data is highly curated. Meaning they've been working on making sure that data is correct for many years now. So that's one scenario.

We also have ChatGPT as an option, 4.0, and we're in partnership with Microsoft and others, where we can go to the open internet and bring information in at the customer's request. That world does need guardrails. And there does need to be rules and regulations so bad things don't happen.

And right now, you're right. Security is on the top of mind for every single CEO out there. It should be every person out there because so many hackers are busy at work trying to do unfortunate things. So yes, I agree there should be guardrails. But I do want to differentiate the two environments.

BRIAN SOZZI: I'll have to leave it there. I know this is a busy event. We'll let you get back to meeting of lots of folks. ServiceNow CEO, Bill McDermott, good to see you. Appreciate it.

BILL MCDERMOTT: Thank you Thank you, Julie.

JULIE HYMAN: Thank you.

BILL MCDERMOTT: Thank you so much. Appreciate it.