Open model advancement favorable for Microsoft, ServiceNow: Wells Fargo

Wells Fargo views the rise of open AI model development as a tailwind for large incumbent software platforms, especially Microsoft and ServiceNow. The firm argues that as open models improve, enterprise customers may still gravitate toward established vendors with distribution, integration, security, and workflow advantages rather than shift entirely to smaller AI-native challengers. The note highlights ongoing progress from open-model efforts such as Moonshot AI’s Kimi K3 and Z.ai’s GLM 5.2, reinforcing the broader competitive pressure in AI, but it frames that pressure as ultimately favorable for scaled incumbents. Market-wise, the commentary supports the idea that Microsoft’s AI ecosystem and ServiceNow’s enterprise software moat could strengthen as AI adoption deepens, even amid rising competition in model quality.