Congratulations, Karen from HR… you’ve officially been replaced by a SaaS subscription.

So it appears the $62B HR software giant Workday just cut a $1.1 billion check for AI startup Sana… a.k.a, the AI cash grab that builds AI agents for every part of HR that makes you want to fake sick.

(Source: Giphy) 

In short, founded in 2016, Sana builds “AI agents” that automate boring-but-essential tasks like performance reviews, dashboards, and knowledge management. Now tucked under Workday’s wing, it’ll be used to help corporate middle managers feel like they’re “leveraging AI” while still spending half the day on LinkedIn.

(Source: Reuters) 

The deal, of course, comes right as HR software M&A is heating up. Thoma Bravo just scooped up Dayforce for $12.3B. Paychex swallowed Paycor for $4.1B. ADP spent $1.2B on WorkForce Software last year. And now, Workday is having its way with the check book. Why? Well, because for Workday, they have one goal and one goal only: become the monopoly for HR. For instance, last month it picked up Paradox for its AI-powered talent acquisition suite, plus a laundry list of smaller acquisitions like Evisort, Flowise, HiredMind, and Plex. Meaning, if there’s a startup pitching “AI for HR,” chances are Workday already slid into their DMs. And Sana is now the latest fling. 

With that said though, there is a small problem here. More specifically, Workday's growth has been slowing. Subscription revenue is soft, stock is down -12% YTD, and investors are getting restless. Case in point: Workday just reported Q2 revenue of $2.35B, up 13% (barely beating estimates), and EPS of $0.84, up 71%. Impressive, sure, but guidance is so muted the silence is deafening. So naturally, CEO Carl Eschenbach is out here buying AI startups like my dad in a midlife crisis buying Harleys thinking it’ll fix everything. 

(Source: Giphy) 

But that’s not always the case. Especially when you’re trying to convince Wall Street it’s an AI company, not just payroll software with lipstick. Now obviously, what do I know? The Sana acquisition might help… if only because “autonomous goal-driven AI agents” sounds sexier than “direct deposit.” But unless Sana suddenly teaches HR how to stop scheduling all-hands meetings at 4:59pm on Fridays, investors should temper their expectations.

In the end, it’s clear the AI HR land grab is on. Everyone wants to own the picks and shovels for the next wave of corporate busywork. Which again, is why Workday's betting $1.1B that Sana is the one to get it done. Only time will tell of course… but for now, investors don’t seem to amused as shares are down -1.16% for the day. Meaning, keep your eyes on this story and place your bets accordingly. Until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.