SAS enters new AI era with IPO on the horizon

SAS Institute cofounder and CEO Dr. Jim Goodnight has been steeping his company in artificial intelligence for decades — long before it became cool.

“AI, which I consider to be neural networks, machine learning, that is really now being called ‘classical AI,’” Dr. Goodnight told CIO.com during the company’s recent SAS Innovate conference. “That’s what we’ve been doing; we’ve been doing neural networks for over 20 years.”

The latest AI wave — generative AI — is something completely different, he remarked.

Although gen AI, too, uses neural networks, it uses a vector “to put you in the right area to start answering the question,” he explained. From there it computes which word has the highest probability of coming next.

“And that’s all it is,” Dr. Goodnight quipped. “So, people are spending millions and millions of dollars trying to figure out what’s the next word in a sentence.”

The multinational SAS is considered the world’s largest privately held software company. In 2021, it pulled out of talks to be acquired by Broadcom, a deal reported to have been valued between $15 billion and $20 billion. The company’s “classical AI” and analytics offerings have underpinned its customers’ efforts to become more data-driven for years, and its cloud-native Viya platform, originally released in 2016, this month went through an agentic era makeover, complete with AI agents, copilots, and synthetic data tools, as well as with AI governance baked in.

CIO.com sat down with Dr. Goodnight and SAS EVP and CIO Jay Upchurch during SAS Innovate for wide-ranging discussions about the company’s direction, the state of AI use today, and the software maker’s long talked-about upcoming IPO.

AI gets agentic

Even as Dr. Goodnight differentiates generative AI from SAS’s legacy in machine learning AI, he still sees significant value in its potential. SAS does use gen AI to assist with code generation, enabling users to ask its assistant a question in natural language and the AI will generate the SAS code that answers it. And, he said, the code is pretty good — on a level of “the first program you ever wrote.”

However, he thinks companies by and large are just telling staff to “go do this gen AI stuff,” and many, he believes, are wasting a tremendous amount of money feeding such systems company-specific training data.

Call centers and language translation are proving to be top use cases for gen AI, “so we’ve done a lot of work with it,” he said, but “it’s not something I think is going to be the future of the world, or anything like that.”

Agentic AI, which focuses on operational decision-making, is AI’s latest incarnation, but the lack of a standard description of what makes a true AI agent is creating confusion in the technology’s early days. “It’s just the latest buzzword to talk about programs that help you make a decision,” Dr. Goodnight said, noting that an agent can just be “a bunch of ‘if’ statements and logic.”

“The thermostat on your wall is an agentic AI,” he explained. “It is a mechanism that senses and has sensors to sense the temperature. It has logic to know when to turn the air conditioner off, and it has a mechanism and a capability of doing that. So your thermostat is a probably an agentic AI that’s been around for a number of years.”

Still, advances in the technology are having an impact. SAS CIO Upchurch noted that decisions powered by the company’s new SAS Intelligent Decisioning are proving popular with preview customers.

“I think decisioning, especially our intelligent decision capability, is really the next forefront of bringing agentic AI to life for enterprise,” he said. “When we were talking to Microsoft about it over a year ago, I think the lightbulb went off in their mind around, ‘Wow, I’ve got to have that embedded in Fabric.’ We brought that to life now for them.”

What SAS customers are asking for

Another area where SAS sees increasing customer interest is around synthetic data — computer-generated data that can help companies with AI training challenges without the customer privacy concerns.

When SAS acquired synthetic data company Hazy late last year, customers didn’t know much about the SAS foray into synthetic data, Upchurch said.

“I think we brought it to life more this week than we have in the past,” he said of the company’s announcements around its synthetic data strategy at SAS Innovate. Now customers are seeing real-world applications. He spoke to one whose data sovereignty problems meant that they had to fly people in a central location to work on sensitive data who now plans to create a derivative synthetic dataset that they can move around the world without legal issues.

Upchurch added: “That’s real-world applicability that they can take home from the conference and immediately show their partners that they’ve got a solution and a trusted partner, SAS, to help them with it.”

Customers are also asking for help with their large language models (LLMs), said Upchurch, noting that SAS can be “a trusted partner in that space.”

“We want to make large language models better, or we want them for use embedded in our solutions,” he said. “It’s not exactly where we’ve invested so far, [but] I think that’s going to continue to evolve as people move further away from just an LLM and more into: What’s the real-world applicability for AI and agentic AI, and how do you make it real for your employees?”

Upchurch also sees customer appeal in the company’s AI governance initiative, which began in 2021 as a passion project led by Reggie Townsend, now VP of data ethics at SAS. Dr. Goodnight has been “so supportive, and I’ll say gracious, with investment,” Upchurch said, adding that the products SAS has created, such as its newly announced AI Governance Map, are based on customer demand.

And “you’re seeing us turn around and give it away for free. I know there are plenty of others out there that are trying to make it much more of a commercial offering,” Upchurch said. The SAS offerings “are available to anybody. I think that’s indicative of our belief in the importance of this. And I think it’s a testament to Dr. Goodnight’s belief, obviously, and what we’re trying to do around trust and transparency.”

The promise of customer choice

Although SAS, like most other vendors, is leaning toward the cloud, the company continues to keep Dr. Goodnight’s promise from many years ago that customers would always have an on-premises option, Upchurch said.

“We definitely, as a corporate strategy, want to empower customer choice,” he said. “If you want to run it on prem, you can; if you want to run it in your cloud of choice, you can. And if you want SAS to run and manage it for you in your cloud choice, we can.”

The SAS 9 (on prem) engine is “greatly valued” by customers; the company continues to maintain it, and there’s a major release in the works, Upchurch said.

That said, SAS is actively encouraging customers to move to Viya, where the company is focusing its innovation, he said. And it seems to be working.

“I have seen more customers in the last 12 to 18 months move directly from an on-prem version of SAS 9 to a hosted version of Viya than I had probably seen in the previous couple years combined,” he observed. “Oftentimes, customers are wanting us to lift SAS 9 from on premises, put it in the cloud and then run Viya side by side. And now what we’re seeing is the adoption is gaining speed, and it’s getting easier for our customers to move workloads from SAS 9 to Viya.”

The long, long journey to IPO

Earlier this month, the Cary, N.C.-based company announced that SAS 13-year veteran Gavin Day was promoted to chief operating officer with a remit in part to help prepare the company for an IPO.  

It’s not the first time going public has been on the table for SAS.

Since the notion of a SAS IPO was presented a quarter century ago, the date has been pushed farther into the future each year. The company, which will celebrate its 50th anniversary in 2026, first made the announcement at a user conference in 2000. That didn’t happen after the stock market collapsed.

In 2021, the notion was revived, with the company saying an IPO was planned for 2024.

There were, however, challenges, Dr. Goodnight told CIO.com.

For example, the company had to consolidate 14 financial systems, which took several years; that new system went live in January 2025. SAS also had to build other systems necessary for public companies, and those went into production at the beginning of May.

“We’ll need to run on that for at least a year before we’re ready,” he said, so the IPO may happen next year, although it’s more likely to occur in 2027.