Thank you again, ladies and gentlemen. Dan Murphy with you from CNBC. Your excellencies and ladies and gents, thank you so much for sticking around for this next conversation. I also want to say thanks so much, John, for that presentation as well. That was marvelous, and we're going to unpack some of the key trends and themes that you were just talking about as well. To set the scene for you, though, I also wanted to introduce the topic that I know you have been focusing in on a lot today at the World Government Summit, and that is, of course, the issue of artificial intelligence. It's no longer just a technological breakthrough; it is also a geopolitical flashpoint. The launch of China's DeepSeek has wiped a trillion dollars off the US tech index in the last couple of weeks, with some even calling it a Sputnik moment for the AI superpowers and the battle for AI supremacy. As Europe now attempts to play catch up, a new wave of tariffs from the Trump administration also threatens to drive up consumer prices, putting global supply chains under strain. And right here in the Gulf, AI and digital transformation are all accelerating at an unprecedented pace, raising opportunities and challenges, including in the security arena, as you've just heard, for businesses and for government leaders alike. So how are the global technology leaders thinking about all of this? Well, I'm absolutely thrilled to be sitting on stage with some serious tech heavyweights here. Arvind Krishna is the chairman and CEO of IBM, Enrique Lores is the CEO of HP, Christian Klein, the CEO of SAP, and John Giamatteo, the CEO of BlackBerry. So let's dive straight into this topic. Arvind, I wanted to start with you. As you've just heard, DeepSeek has been called America's Sputnik moment. So what's your take on this as a technology leader? Is the United States still leading the global AI race, or is China setting the pace?
Look, there's always competition. I would not have called DeepSeek a Sputnik moment. It is a wake-up moment. It is a wake-up moment that the trend which every technology for 70 years has seen is happening: cost comes down, the ability to serve it comes down, competition springs up. So the advantage for everybody—every enterprise, every government, every consumer—is much, much lower cost going forward. For the tech industry, it means you've got to find cheaper and cheaper ways to go develop these things and bring them forward. On your question on AI leadership, look, the first one to do something is always the very hard one. Once it's been proven, people who are smart, people who have abilities are going to follow and catch up. So I don't regard that as being an inhibitor to the business, but AI should be global, and AI should advantage everybody, is kind of what I take away from that moment, if anything.
Christian, over to you. Do you think Europe is too far behind to catch up now? You've been listening in to what President Macron has been saying in the last couple of days, and these developments happening only in the last few hours in Europe. What's your take?
I mean, look, with regard to Europe, I would give every European good advice: don't try to play me-too and try to copy and force now to have another large language model provider. At the end, what is key for AI is business data, and without business data, AI is useless. Large language models read the internet, the worldwide web, really well and they understand unstructured content, but Europe has in many industries very wealthy business data which is important for AI, and so Europe should apply this technology. SAP, we feel more like Switzerland in between. We are using large language models from China, we are using large language models from the US, we are running multinationals. But what SAP can do is we're going to infuse business AI into the business processes of our customers. And no matter if you're in manufacturing, in retail, or in the public sector, what you need is you need to provide value for the end users. And this is what we can do, not only in Europe, but across the world. And the LLMs, DeepSeek has showed it, they will be more and more commoditized and the value creation will happen at the business layer, at the business processes. And that is what Europe, but every other company on this planet, should focus on.
Enrique, over to you next. How does HP stay competitive when all of this development is happening in such a fragmented way?
Actually, we are doing two different things. From one side, we are integrating AI in all of our portfolio, and we're in a company that produces personal devices. And when Arvind was talking before about DeepSeek and the changes this is driving, one of the changes this is making very real is that you can run models much simpler, and this is really going to help us to enable the consumption of AI at the edge. And the second big change that we are doing is responding to the change of globalization. One of the big changes that we're going through now is the fact that building products in one place, we have learned, is not resilient enough, also probably doesn't respond to the current geopolitical situation. So we have embarked in a process to diversify our supply chain and building manufacturing hubs all over the world. And this is a big change that only a few years ago would have been totally impossible.
John, weigh in on this as well, because BlackBerry, as you've just explained very well, has pivoted to cybersecurity and IoT. How do you see this AI race reshaping digital security risks, and are we prepared for the threats ahead as we see this development taking place and as we see what could potentially be a decoupling in technology between the United States and China?
100%. I would kind of piggyback a little bit on what Christian was talking about is, to me, it's all these business use cases. How do we take this data and really improve the productivity, the value that we create? In our case, we try to do it pervasively. Our threat intelligence models make the efficacy of our products better from a cyber perspective. I would even tell you from a go-to-market perspective, we use it to improve our lead generation, to target the specific customers that make sense for us to go after. So those different use cases—customer service and support, using it as a tool to have self-help capabilities where our customers can answer their questions so much more effectively than they did if they called us in the old models of a call center. So I think those types of applications will really create the value of it and be kind of a flywheel effect of value for the industry.
Just a question for the panel broadly, anyone can pick this up: what will determine who will lead the global AI race as it stands? Anyone want to take that question?
I think it's going to be driven by innovation. Those companies and those countries that will continue to innovate, that will, in the balance between innovation and regulation, favor innovation, I think are the countries that will be winning. As Arvind was saying, in technology, being first is very important, and those that will drive that will have a competitive advantage.
Look, it's a 10/90. 10% of the value will go to those who invent and come first forward. That 10%, as Enrique was saying, is going to go to places who have the university structure, the capital structure to take a lot of risk and go forward. You can make your own bets on who that is. 90% of the value goes to everybody who deploys. As Christian was saying, if 90% of the value goes to those who deploy, that means people who embrace it, people who actually put it into their solutions are going to be the winners and the victors of that 90%. That is where regulation comes in, to not be in the way of them using it. That is where I think policymakers and regulators, they're all obsessed on the innovation. Put that aside for a moment; that is 10%. It is important, but the other 90 is far more important.
And look, I mean, just today I met so many customers, public, private sector, and look at all the disruptions which happened with new technology in the last 20 years. It's about applying this technology in the context of your business. And so when we are talking about agentic AI, we are not only talking about large language models, we are talking about how the AI foundation, the business data of SAP, can help together with the large language models to build the best agentic AI for procurement. I mean, I'm convinced in four to five years, why to have a big procurement organization? At the end, a procurement agent can do the sourcing, the negotiation, and all the automation on the billing side much better than any human being. When you think about supply chain and predictive management and increased production uptime and the productivity of your supply chain, at the end it's about applying AI in your supply chain. So it's also about a business transformation, and that is, I guess, what really will decide if you as a company will lead in your industry or not. It's not only about buying a little piece of technology; it's about applying it in the right way in your industry, in your business.
John, did you want to speak to that as well before we move on?
Yeah. Really, to make it, I think, come to life, what we try to do is immerse the technology in our day-to-day activities at the company. We literally encourage our employees to use it as aggressively as they can because they're the ones that are going to find the interesting use cases and the value. And creating that kind of ecosystem and that kind of environment where the technology is great, but it's only as good as the people that use it and generate the value out of it and create the use cases that I think will really drive the industry. So I think the approach from a company standpoint and the tone from the top of driving that through the organization, I think, is going to make a huge difference in this thing really taking off.
I wanted to focus in on what's happening here in the UAE and in the Gulf because there has been so much development in the AI space in particular. This country had an AI minister long before anyone knew what ChatGPT actually was. So Christian, first to you on this. SAP's been deeply involved in the regional digital transformation story. What's the biggest opportunity for AI transformation in the UAE and in the Gulf?
I mean, first of all, kudos for this event, the World Government Summit. It's great to get new insights, to get new ideas, but also to network, and it also shows how this region here is really leading in digital transformation. I can remember when I was here for my first time nine years ago, all the companies were already embracing, no matter if it's public or private sector, when in Europe we are still discussing is the technology secure enough, can we apply it here? It's already happening. And also now when we talk about inventory, asset management, about saving billions of dollars by getting smarter on how to run your supply chain, here actually we find the use cases by the customers giving us the feedback. We have our experience, we have our lab here in the region, and then we, of course, globally develop that technology at scale. But what is very important is to innovate at the customer side and to take this feedback and bring it back into your solutions and then embed it into the business of our customers. And here in this part of the world, it works extremely well. And we are further investing. And also with regard to SAP Cloud, maybe one last piece: it's also very important to talk about responsible AI. The customers are asking rightfully: what is happening with my data? Is it staying in the country? Who is touching the data? And so that is also very, very important when you run mission-critical workloads, and you have to absolutely adhere to these requirements to really exploit this new, powerful technology.
