Workday (WDAY) CEO Carl Eschenbach said the AI boom is overheated — but he’s ready to cash in.
“I do think valuations are frothy,” Eschenbach told Yahoo Finance’s Market Catalysts. “That will kind of play out over time. And I think it will be a rich opportunity for folks like Workday … to come in and potentially acquire these companies.”
Workday has made five AI acquisitions in just under two years, including three in the past three months: Paradox, Sana, and Flowise. Eschenbach said the company is actively scouting more deals, but only at the right price.
“We will not overpay,” he said. “We look for companies that have great value, bring us great technology … and they fit into our go-to-market strategy.”
Alongside the deal spree, Workday is also rolling out new AI tools. On Wednesday, the company unveiled a custom AI library designed to help businesses process unstructured data, such as contracts, faster.
One of its first use cases is a contract negotiation agent that can automatically compare terms, redline clauses, and send revisions back — work that normally takes hours. Eschenbach pointed to lawyers as an example, saying it would boost “the productivity you gain for your attorneys.”
The product launch also comes with a new pricing model. Rather than the traditional seat-based model, the company is introducing “flex credits” that let customers prepay for a pool of credits to use across its AI agents.
“As they use our agents and they see more value and there’s more usage, they burn down those credits,” Eschenbach said.
The CEO drew a sharp line between Workday’s approach and general AI platforms like OpenAI (OPAI.PVT).
“We don’t hallucinate because of the cleanliness in how highly curated our data sets are,” he said, pointing to 75 million users on Workday’s platform and 1 trillion annual transactions as key differentiators.
And unlike some tech leaders, he’s not predicting mass AI-induced layoffs.
“We don’t believe AI is going to replace humans,” he said. “We think it’s going to drive a step function change in human productivity, and we’re going to amplify human performance, not replace it.”
Workday’s stock is down about 4% year to date as investors wait to see if the company can turn its AI vision into real growth.
A new note from Evercore ISI offers a cautiously upbeat outlook. Analyst Kirk Materne raised his price target to $300 from $275, saying Workday is “evolving its core platform and making acquisitions that should help the company deliver durable growth in an AI world.”
finance.yahoo.com
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