ServiceNow (NOW) , which makes digital-workflow software, said Monday that it’s buying Element AI, a Montreal artificial-intelligence company.
Terms weren't disclosed. But multiple sources told TechCrunch that the deal price was around $500 million.
“Element AI will significantly enhance ServiceNow’s commitment to build the world’s most intelligent workflow platform, enabling employees to work smarter and faster, streamline business decisions, and unlock new levels of productivity,” the Santa Clara, Calif., cloud-computing-solutions provider said in a statement..
Element AI's scientists and practitioners bring "expertise in applying modern AI to text and language, chat, images, search, question response, and summarization and will accelerate AI innovation natively in the Now Platform.”
With the acquisition, ServiceNow said it would create an AI Innovation Hub in Canada to speed "customer‑focused AI innovation" in its platform.
Element AI has received more than $250 million in funding since it began four years ago, according to the Toronto Globe and Mail.
ServiceNow expects to complete the acquisition in early 2021. The company has made three other AI acquisitions this year: Loom Systems, Passage AI and Sweagle.
ServiceNow recently traded at $526.28, down 0.2%. The stock is up by a factor of six this year.
Morningstar analyst Dan Romanoff likes ServiceNow but says the stock is overvalued.
“ServiceNow continues to leverage its strength in workflow automation to penetrate existing customers more deeply in IT and more broadly with HR and customer service specific products,” he wrote last month.
“We maintain our wide moat” rating. Romanoff puts fair value at $440.