ServiceNow Acquires MoveWorks for $2.85B; OpenAI Pushes for AI Regulation Easing Amidst Competition

[00:00:01] It's Friday, March 14th, 2025, and I'm Dave Sobel. Three things to know today. ServiceNow drops billions on AI, but will automation actually deliver? The regulation tug of war, OpenAI wants freedom, California wants rules, and Google and Apple just keep winning. And, AI is a tool, not magic, Salesforce stumbles, Cuban sets the record straight, and IT takes over HR. This is the business of tech.

[00:00:30] ServiceNow announced its acquisition of MoveWorks, an enterprise AI specialist, for $2.85B. This acquisition is expected to be finalized in the second half of 2025 and aims to enhance ServiceNow's artificial intelligence and automation capabilities by integrating MoveWorks AI Assistant and enterprise search technology. Currently, ServiceNow is already serving nearly 100,000 AI customers and has surpassed

[00:00:58] $200,000,000,000 in annual contract revenue for its ProPlus AI offering. MoveWorks has successfully deployed its AI Assistant to almost 5 million employees across various organizations, with 90% of its customers using the offering company-wide.

[00:01:16] OpenAI has launched a new suite of tools and APIs to assist developers in creating AI-powered agents more efficiently. This includes the Responses API, which integrates features from its existing APIs, allowing developers to leverage web and file search capabilities, as well as a computer use tool for automating tasks.

[00:01:36] The OpenSourceAgents SDK enables developers to build and manage agents using OpenAI models or even non-OpenAI models. The Responses API is now available to all developers with usage billed at standard rates. Google announced the release of GEMMA 3, claiming it to be the most powerful artificial intelligence model that can operate on a single graphics processing unit.

[00:02:02] This model, which supports over 35 languages, is designed for developers to create AI applications across various devices, from smartphones to workstations. GEMMA 3 boasts enhanced performance, outperforming competitors like Facebook's Llama and DeepSeq on single GPU setups. The model includes an upgraded vision encoder that can handle high-resolution and non-square images, along with a new safety classifier to filter harmful content.

[00:02:32] Despite its advanced capabilities, Google emphasizes that GEMMA 3 has been evaluated for potential misuse, indicating a low-risk level for creating harmful substances. The company is also offering Google Cloud credits to promote GEMMA 3, while academic researchers can apply for a program providing them with $10,000 in credits to support their research endeavors.

[00:02:55] Alibaba Group introduced a new artificial intelligence model capable of reading emotions, aiming to compete with OpenAI's latest offerings. The R1 Omni model, developed by Alibaba's Tongji Lab, was demonstrated to infer emotional states from video, while also providing descriptions of a person's clothing and surroundings.

[00:03:16] The model enhances computer vision capabilities and is an improved version of the previous human Omni model created by their lead researcher, Zhang Xiquo Zhou. Why do we care? Two threads. First, AI-driven automation is the current bet. Second, models are getting smaller and having specialized focus. A single GPU AI model that outperforms competitors like Lama is a big deal.

[00:03:42] It suggests that AI workloads are becoming more accessible, allowing more businesses to run more powerful AI on lower-cost infrastructure. And while these advancements are impressive, they also highlight the risks of AI hype. AI-powered automation tools promise efficiency, but their implementation often falls short of expectations. Filter based on aligning AI adoption with real business outcomes rather than chasing any trends.

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[00:05:00] CNBC is reporting that OpenAI is actively lobbying the Trump administration to ease regulations on artificial intelligence to promote faster advancements in the field. Following President Trump's revocation of the nation's first AI executive order, OpenAI submitted a proposal emphasizing the need for a light regulatory touch and faster approval processes for new technologies.

[00:05:23] The company argues that its recommendations could enable access to new AI services by government agencies about a year earlier than current timelines. Amidst ongoing legal battles and public scrutiny, OpenAI also expressed concerns about competing Chinese AI startups, highlighting that DeepSeq has gained popularity in the U.S. market, indicating that while the U.S. may currently lead in AI, this advantage may be diminishing.

[00:05:48] Meanwhile, the markup highlights how California lawmakers are pushing forward with 30 new bills aimed at regulating artificial intelligence, following a series of vetoes from Governor Gassim Newsom last year. Assembly Bill 1018, proposed by Democratic Assemblymember Rebecca Bauer-Kahn, seeks to protect individuals from automated discrimination and mandates that AI developers evaluate their technologies before deployment.

[00:06:16] This legislative effort comes amid a changing political climate, with increased public concern about AI's impact, as highlighted by a recent Carnegie California poll where 50% of respondents expressed worry about artificial intelligence. In contrast, the Trump administration has opposed such regulations, emphasizing innovation over oversight.

[00:06:38] A UK competition authority investigation has found that the mobile browser duopoly of Apple and Google is stifling innovation and potentially hindering economic growth. The 611-page report highlights that Apple's policies, such as requiring the use of its WebKit browser engine in iOS, limit competition and feature development for rival browsers.

[00:07:01] The inquiry also raised concerns about revenue-sharing agreements between Apple and Google, which reduced the financial incentive to compete. Despite these findings, no enforcement actions are planned in the UK, as the report suggests waiting for the activation of special abuse control powers. Potential remedies include requiring Apple's to allow alternative browser engines and regulating how Google displays browser choice options.

[00:07:27] This investigation follows ongoing concerns about the tech companies' influence on mobile markets, with anticipated conclusions from the Digital Markets Unit expected later this year. Why do we care? Why do we care? With states like California pushing stricter oversight, while the federal government leans towards deregulation, businesses operating across multiple jurisdictions may face compliance headaches.

[00:07:52] And with so much technology coming out of California, regulation there may become the de facto standard. Be skeptical of OpenAI's motivation. A lower-cost model threatens their position as models become commoditized. And let's note how Apple and Google revenue-sharing agreements reduce incentives for true competition in mobile browsers. That technology distinctly appears to be stagnating. And time for some big ideas.

[00:08:20] The information digs into Salesforce's new artificial intelligence product, AgentForce, which aims to automate customer service and business functions. The product is facing challenges in gaining traction among its clients. Despite CEO Mark Benioff's optimistic declaration of 2025 as the absolute year of AgentForce, Chief Financial Officer Amy Weaver expects only modest sales growth of 7-8%, marking the slowest growth rate in the company's history.

[00:08:48] Salesforce has closed 5,000 AgentForce deals since its launch, yet many customers remain hesitant to fully commit due to high costs and concerns about the software's reliability. As the company grapples with the competitive landscape, it's begun discussing potential price adjustments and financial incentives to encourage adoption.

[00:09:10] Meanwhile, the company's stock has dropped 10% over the past year, significantly trailing behind competitors like SAP and IBM, who have successfully integrated AI features into their offerings. And covered by TechCrunch, at the recent South by Southwest conference in Austin, Mark Cuban emphasized that artificial intelligence is a tool, not a standalone solution for entrepreneurs. He urged attendees to dedicate their time to learning about AI, highlighting its potential to help small businesses thrive.

[00:09:39] Cuban noted that starting a business today is significantly easier than it was in the past, as access to technology has dramatically reduced costs. Once requiring $5,000 for a personal computer, now it takes a laptop and an internet connection. While acknowledging the limitations of AI, such as inaccuracies and hallucinations, he asserted that it can enhance existing skills and assist with tasks like research and communication. Cuban warned against over-reliance on AI, stating, quote,

[00:10:10] He stressed the importance of creativity in using AI effectively, especially in fields like art and writing. And Fortune profiled Jason Monar, a former FBI agent who transitioned to corporate security as the chief information security officer at Kaseya after nearly 16 years with the Bureau.

[00:10:30] In 2021, cyber crime surge, highlighted by a significant ransomware attack on Kaseya by the gang R-Evil, which infiltrated the company through its remote software, affecting over 1,500 businesses and demanding $70 million in cryptocurrency for decryption. Manar, who led the FBI's response during the attack, emphasized the challenges of cybersecurity culture in corporate settings.

[00:10:53] He aims to build a robust cybersecurity framework at Kaseya, which previously lacked a centralized security office. Following the incident, Manar was promoted to assistant special agent in charge before ultimately deciding to leave the FBI for Kaseya. Finally, in ZDNet, as artificial intelligence agents become increasingly prevalent, information technology departments are evolving to take on roles traditionally held by human resources.

[00:11:20] This transformation, highlighted during a recent panel hosted by Deloitte at the Mobile World Congress, emphasizes how AI agents are becoming integral to enterprise systems, akin to microservices architectures. Experts suggest that these agents can execute tasks independently, representing a shift in workforce management.

[00:11:41] Brian Thompson from Hewlett Packard Enterprise noted that agentic AI offers opportunities to solve complex problems by breaking them down into specialized services. However, challenges remain regarding data management and trustworthiness, with experts like Abdi Guzzari from Deloitte pointing out that organizations must adapt their cultures and strategies to integrate these advancements effectively. Why do we care? So here are your thought questions.

[00:12:08] Salesforce's underwhelming agent force sales underscores a critical lesson. AI, no matter how powerful, must deliver clear and immediate value to customers. Ask. Why. The problematic uptake. Cuban's take on AI is refreshingly practical. AI isn't an answer, it's a tool. So where can you push back in areas where AI is presented as the answer to find the better solution? What does it mean when an FBI agent takes the reins for security at a commercial organization like Kaseya?

[00:12:39] Companies see huge value in hiring former FBI, NSA and military cybersecurity professionals. Where else might hiring outside expertise be useful? And if agents become digital workers, what HR related issues will IT and MSPs have to consider, particularly if those workflows are interacting with humans. Thanks for listening.

[00:13:04] Today is of course, Pi Day, but it's also National Potato Chip Day and International Ask a Question Day. If you have one for me, make sure to reach out. Nerdy Ocon will be held in Palm Springs, California from April 7th through 9th. Visit NerdyOcon.com to learn all about. The Business of Tech is written and produced by me, Dave Sobel, under ethics guidelines posted at businessof.tech.

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