Workday CEO calls narrative that AI is killing software 'overblown'

In a recent appearance at the World Economic Forum in Davos, Switzerland, Workday's CEO Carl Eschenbach sought to quell fears regarding the impact of artificial intelligence on the software industry. He dismissed the prevailing notion that AI is detrimental to software business models, stating emphatically, "It's an overblown narrative, and it's not true," during his interview on CNBC's "Squawk Box." Concerns have recently intensified in the market, leading to a sell-off of software stocks as investors fret over the potential for AI to disrupt long-established business practices that have historically driven significant profits. Last year, Workday's shares plummeted by 17%, and they have seen an additional 15% decline since the start of 2026. The company's third-quarter earnings report revealed disappointing subscription revenue guidance, causing unease among analysts and investors alike. Other major players in the software sector, such as Adobe and Salesforce, also faced losses of 21% last year, while HubSpot's stocks dropped over 40%. In contrast, Eschenbach indicated that businesses are increasingly turning to Workday for advanced AI tools and first-party data, which the company utilizes to maintain a competitive edge over third-party solutions. In response to the evolving landscape, many software companies are investing heavily in enhancing their AI capabilities. Workday itself cut approximately 1,750 jobs last year to reallocate resources towards AI development. Additionally, ServiceNow recently sealed a three-year partnership with OpenAI to enhance its offerings. Eschenbach concluded with an optimistic outlook, stating, "We are uniquely positioned to be one of the AI winners in the enterprise because of our incumbency, and lastly, because of the trust we get from our customers."