It is absolutely such a blessing. So, take a seat, make yourself comfortable. These are really comfy chairs here.
Yeah, it's quite okay. Yeah, you're right. No, I actually sit here for the first time, so.
Thomas, I'm really happy to dive into a few topics with you. But, first of all, you just told me backstage that you've been at the Welt KI Congress Summit. Who saw the pictures on LinkedIn of Sam Altman being there? Yes, a few of you. It was I think it was huge on LinkedIn. Everyone posted about it. So, you were there. You kind of met Sam Altman. You can tell us a little bit about his person, about the whole event. Let us know, how was it?
Well, first and foremost, it was an amazing event. And it's a significant award for Sam in that regards. But, it was also very important moment for us at SAP, but also, I hope, for the entire community in Germany, because we announced the partnership that we will basically bring OpenAI with ChatGPT and all the models in a sovereign infrastructure in Germany, operated fully by SAP for the public sector and the regulated industries. And with that, with the power of that in a sovereign fashion now available in Germany, which I think is a very bold move.
So, this is what you announced last week. Little more slowly. So, that means you actually take like the whole, let's call it, machine of OpenAI, ChatGPT, you're going to take it to your service in Germany, in Europe. And like, how does it work? Such a deal look like? Are you paying like a licensing fee, or how must I imagine this kind of cooperation?
The deal structure, you can imagine, super complex in all regards. But, I mean, technically, what we fundamentally do, and we do that already also with our data cloud, which is a subsidiary in Germany, for instance, with Microsoft, that we take basically the technology from these providers, from the leading tech providers, but we as a company operate it fully. We own it, we operate it. And with that, we can also guarantee there's nothing going back to the US or connectivity and with that it's really a sovereign offering in four dimensions. And these four dimensions are super critical for us. Data sovereignty, technical sovereignty, legal sovereignty and last but not least operational sovereignty. And that's what we bring together as Germany's largest tech company and we see our obligation quite frankly and responsibility to help this country for digitalization and also innovation. And that's also reason why we believe we need to bring this leading tech in Europe. Also when we talk sovereignty overall, it's not just about everything must be end-to-end in German technology because then we would miss out significant technology and innovation to drive digitalization.
Is that the case? Wouldn't it not still be better to have like an OpenAI in Germany?
I think for sure it would be better if you would have all this technology in Germany, but we also need to I think acknowledge and accept that there are certain parts of technology where partnership is important. But the question is how do we make this partnership successful in this sovereign context on our terms? And that's exactly what we do. And I think in Europe we have amazing opportunities. We also have a partnership with Mistral as an example, which is an amazing company and also the founder and CEO has a phenomenal vision and certainly also more to hear about this partnership in the weeks to come. But that's the reason I feel we have amazing technology, but also if we talk about sovereignty, it means optionality. With sovereignty it also means we have alternatives. And in this regard, we offer our customers now OpenAI in a sovereign fashion, Mistral in a sovereign fashion, Aleph Alpha in a sovereign fashion. So basically have choice and choice is I think an important good for our customers.
So, when is it available?
For the OpenAI topic, it will be middle of next year.
Middle of next year. Okay. So, like how does this kind of deal work? Like did you or did Christian Klein meet Sam Altman personally or like?
Multiple times, actually. Multiple times.
It was actually virtually. All that deal was actually structured virtually.
Ah, I like the idea. Cool, really good. Okay. Yes, I mean I believe in it. I run a fully remote company, but some people still tell me for real deals you need to come on site. And I'm like, 'No.' And you proved that it was virtual. You proved me right. Okay, I like that. So in general, you're going to roll it out. It's going to be available next year. But what's in general above that? SAP's vision on AI.
I think from the AI perspective for us it's super important. I think we all learned about AI that it's based on data in the end of the day. Which means a classical traditional LLM by definition gets commoditized because they are all trained by the same public information. Now, to make value out of AI, you need to get the business context in an enterprise environment. The business context in the mix. When I talk about business context, it's the combination of the business process which you are in and the business data. All of that in this regards is in the SAP business systems. Which means we leverage this significant and differentiating data and we mix it together with the best LLMs and our own foundation model to drive differentiated outcomes. Having said that, we don't want to have just a technology player on AI. And the MIT study is basically proving that a lot of projects fail because people take technology, but to get it all in an effective manner for value is difficult. Our strategy is embedded AI. So we fundamentally believe in every enterprise system does naturally AI embedded. And in our portfolio now till end of the year we'll have 400 embedded GenAI cases and more than 60 AI agents which are just part of the product. It's just the natural way people will work in the future. And on top of that, we have a co-pilot called Joule, which is not only a digital co-pilot, but also our multi-agent framework because we truly believe in an open ecosystem for agents collaborating with each other. We also are founding partner of the A2A protocol to really ensure that all agents can connect and integrate with each other. And that's what Joule will also facilitate. So, basically, our customers have the benefit of this co-pilot and multi-agent framework, the embedded AI cases, and for sure they can build their own custom cases with our business technology platform.
Okay, so you believe in embedded AI. Did Sam Altman say anything about his vision of AI?
Yeah, he was actually that was very very exciting, actually, because what basically Sam is working on is really this AGI topic. He believes we can really get to the he said GPT-8, so let's see if it's GPT-8 or 7 or 9. But fundamentally, the question is, well, that was the interesting thing. How do you prove that it's AGI? What's the test? The Turing test itself will not be sufficient anymore. So, what's basically the reasoning that you can accept it's AGI? That was actually a very interesting conversation also with Professor Deutsch from Oxford about what's the definition that you would agree that it's AGI? And that was a phenomenal opportunity.
And what is it? What did they say?
They did actually the test of the explanation of the story how the model came to the conclusion to solve quantum physics. Mhm, okay. And if that can be solved with AI, then fundamentally, we are on that point that they what actually Sam told me, that is a striking factor, and I think it's true because I thought a lot about after that statement about it was he said, 'It's interesting that also with the GPT-5 launch, you clearly see that this excitement this incremental excitement is gone. GPT-4, GPT-5, nobody worries anymore.'
Yeah. And it's not like the announcement of the I mean, what is this big thing?
The interesting piece is fundamentally GPT-5 and many other models as well, they would basically win the most contests for everything what you can play, everything what you can do in school, in the university. They could do it. Mhm. So, what does that mean now for us in the business context for jobs, for roles, for how we work? And that's where he basically mentioned, I agree to that, we think still too little about how will the jobs in the future look like? If we really embrace it, what will that do to society? With our education system, how do we need to change that? And that's a fair request.
Especially for like a huge company like SAP is, right?
Absolutely. Yeah, and what do you think? I mean, for us it's very clear. I mean, every in general software companies are disrupted by AI. Actually, I believe the disruption potential of AI is as we speak the largest in software companies because code generation is certainly the most advanced GenAI case which we see with the highest productivity gains. We see that as well. And now think about we have 40,000 developers. If we can increase by 30% the productivity of 40,000 people, think about how much innovation we can deliver to our customers. This is phenomenal and we need to harvest that potential and that means for sure we need to educate our own people. We need to bring fresh new talent out of the university to open our mind and for sure we here at Bits & Pretzels, we need to collaborate with startups to get fresh perspective, fresh technology we can use in our technology stack forward to our customers because that's our customers demand always the latest and greatest.
What I find is so interesting, you already talked about your people now and to open up their minds because if you think of software engineers, I always feel you automatically think that they are using AI in programming, but a lot of them aren't. Like some are even denying and they're like, 'No, I'm not I want to code like I do today and I don't want to use AI.' And do you have like some kind of assessment internally that the people who already work for you are reviewed in a certain way?
No, absolutely. We definitely see actually the usage of GenAI tools as part of our development life cycle, absolutely. And we see the productivity gains. The interesting piece of the productivity gains is that in the traditional code generation for sure there's a massive acceleration. But we all need to acknowledge a usual developer of a company, they don't only do coding. I mean, this is just one part of the job. In reality, development is a super creative job, if we are really honest. And that means, for sure, you optimize one part of the job, but you need to be always specific with the productivity gains in which area. But we see these benefits and we are excited about that. And to that point, we also provide basically these type of GenAI capabilities. We call it Joule for developer for our own proprietary development language. Because our vision for sure is that our customer can use tooling to help actually migrate from some older systems to the new cloud versions, which we have in a way more seamless fashion. That also the project timelines, the project costs go down. And with that, enable our customers to benefit from all these innovations our developers generate. And that's fundamentally also my key role in this company. How can we accelerate innovation adoption, which we, in my perspective, urgently need around the world, but also for sure specifically in Germany. And that's something where I'm very keen to see what we can do there with the help of AI.
Yes. So, the motto of today is connecting Europe. What do you think is SAP's role in this whole context? I mean, you run the data of so many businesses is stored in a way managed and processed by SAP. What is your role and how do you think can we gain back sovereignty, which we might have lost already?
I think first and foremost, as Europe's largest tech company, we see our obligation and role in that one and the responsibility to help Europe and Germany to have sovereign offerings in place.
First and foremost, we are super committed. We invested with Charles announced it now 20 billion incrementally fundamentally to help on the sovereignty. And it's fair to say, with the geopolitical situation, we see way more demand from our customers, which is requesting that. What we do there specifically? We have an offering, which is touching on the one hand side, the public sector. There we have a subsidiary called De-novo Cloud, where we will be able to provide real true sovereign solutions to the public sector respecting the basically the cloud platform requirements from the BSI. We have a sovereign solution SAP cloud infrastructure for instance for the regulated industry. So we have customers like Hensoldt, customers like the Bundesagentur für Arbeit employment agency which are running in the cloud with us in a sovereign fashion. We even now extended that offering to say we have an on-site option. So for really highly specific cases where customers say I want to have the cloud quote by quote in our basement in our facilities.
