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By Jaspreet Singh
(Reuters) -ServiceNow said on Monday it would buy AI firm Moveworks for $2.85 billion in cash and stock, marking the software maker's largest-ever acquisition when enterprises are spending heavily on the technology to enhance their IT operations.
The rapid rise of generative artificial intelligence has pushed companies such as ServiceNow and Salesforce to augment their products, striking new deals to stay competitive in a fast-evolving software market.
Moveworks, which offers agentic AI solutions to assist clients, counts chipmaker Broadcom, cybersecurity company Palo Alto Networks and social media platform Pinterest among its customers.
The AI assistant maker's more than 500 employees will join ServiceNow. "We have no plans at this time to make any layoff announcements related to this deal," ServiceNow Chief Financial Officer Gina Mastantuono told Reuters.
ServiceNow's "Now Assist" competes with the AI chatbot provided by Moveworks, but they take different approaches.
Mastantuono said the company does not expect any potential regulatory hurdles for the deal.
Privately owned Moveworks focuses on using AI to understand and resolve employee issues through chat. Its chatbot can be integrated with platforms such as that of ServiceNow, Salesforce's Slack and Microsoft's SharePoint.
ServiceNow integrates AI into its entire service management platform, aiming to streamline workflow and improve overall efficiency.
Shares of the Santa Clara, California-based company were down 7%. The deal is expected to close in the second half of 2025.
Moveworks closed a $200 million in Series C fundraising in 2021, which took its total funding to $315 million, with a valuation of $2.1 billion.
The funding was led by Tiger Global and Alkeon Capital. Existing investors Lightspeed Venture Partners, Sapphire Ventures, Bain Capital, ICONIQ Growth and Kleiner Perkins also participated in the round.
J.P. Morgan Securities LLC is ServiceNow's lead financial adviser for the transaction.
Bloomberg News on Sunday first reported about the companies nearing a deal.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Leroy Leo and Shilpi Majumdar)