While the financial terms of the deal were not disclosed, TechCrunch reported citing multiple sources that the price was around $500 million.

With the acquisition of Element AI, ServiceNow said on Monday it will create an AI Innovation Hub in Canada to accelerate customer-focused AI innovation in the Now Platform, the name for the company's automation services.

The Canada innovation hub follows similar investments by ServiceNow to create technology development centres in Chicago, Hyderabad, Kirkland, San Diego, and Silicon Valley.

"AI technology is evolving rapidly as companies race to digitally transform 20th century processes and business models," ServiceNow Chief AI Officer Vijay Narayanan said in a statement.

"ServiceNow is leading this once-in-a-generation opportunity to make work, work better for people. With Element AI's powerful capabilities and world class talent, ServiceNow will empower employees and customers to focus on areas where only humans excel -- creative thinking, customer interactions, and unpredictable work. That's a smarter way to workflow."

ServiceNow has seen strong demand for its AI-powered products such as IT Service Management Pro, Customer Service Management Pro, and HR Service Delivery Pro.

With practical, purpose-built AI and analytics capabilities embedded into its Now Platform and workflow products, the company enables enterprises to surface and summarise relevant information, understand content and conversations, make predictions and recommendations, take optimal actions, and automate repetitive tasks.

"Element AI's vision has always been to redefine how companies use AI to help people work smarter," said Element AI Founder and CEO, Jean-Francois Gagne.

"ServiceNow is leading the workflow revolution and we are inspired by its purpose to make the world of work, work better for people. ServiceNow is the clear partner for us to apply our talent and technology to the most significant challenges facing the enterprise today."

The acquisition of Element AI is ServiceNow's latest strategic investment to accelerate AI innovation in the Now Platform.

In March, the company hired Narayanan and launched Now Intelligence, a set of powerful AI capabilities to help customers scale insight to action.

Element AI is ServiceNow's fourth AI acquisition in 2020, following Loom Systems, Passage AI, and Sweagle.

ServiceNow expects to complete the acquisition in early 2021.