German software giant SAP SE announced on Wednesday that it will team up with OpenAI to deliver artificial intelligence services like ChatGPT to Germany’s public sector through a new program called “OpenAI for Germany.”
According to a joint statement from both companies, the partnership will provide these AI tools through SAP’s Delos Cloud platform, which stores data locally and follows European regulatory requirements. SAP’s stock price jumped more than 2 percent following the announcement on Wednesday.
This move represents the latest effort by Europe’s biggest technology company to adapt its business for the generative AI era. After spending years adjusting to risks associated with cloud computing, SAP has previously invested in smaller AI startups like Cohere, Aleph Alpha, and Anthropic, which compete with OpenAI.
The partnership comes as SAP’s 45-year-old CEO Christian Klein faces the challenge of finding his company’s next growth engine. Klein took charge six years ago when SAP’s sales were stalling.
The company, which creates software for corporate finance, sales, and other business operations, had fallen behind in the shift to cloud computing. During an early earnings call, Klein delivered disappointing projections that sent stock prices down over 20%.
SAP’s cloud gamble and the high-stakes Push into AI
Klein told corporate customers they had to move their data to SAP’s cloud products or lose company support entirely. Klein later admitted he needed “a glass of wine or two or three” after that difficult period. This year, SAP expects cloud sales to hit nearly €22 billion ($26 billion), almost three times the 2019 figures.
However, Klein now requires a second act. The cloud transition boom will start slowing in 2027, when SAP plans to reduce support for older software systems. Since customers must switch their systems by then, most spending will happen in the coming years.
SAP is betting on artificial intelligence as its future growth area, but faces tough competition from major tech companies worldwide. Some customers are already frustrated with expensive cloud upgrades.
Technology consulting firm Gartner stated this year that SAP may be dropping market share in newer products beyond its main business and upsetting clients with aggressive sales approaches.
Company insiders reveal concerns about whether SAP can successfully get customers to adopt its new AI offerings. Investors, who had been optimistic about cloud growth, recently sold shares over worries that AI could disrupt the company.
The stakes extend beyond SAP alone. As one of Europe’s few world-class software companies in its field, SAP’s success matters for the continent’s tech independence. The company has outgrown its former American competitor, Salesforce Inc., in market value, and helps ensure European businesses don’t rely entirely on other regions for innovation.
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