During a recent annual press conference, Christian Klein, CEO of SAP, spoke about the company’s financial results and shared his views on the regulation of artificial intelligence (AI) in Europe. As Europe’s leading software company, SAP’s performance is closely monitored and its latest financial data has certainly attracted attention.
Klein highlighted the need for Europe to reconsider its approach to regulating AI technology. He expressed concern that excessive regulation could hamper the continent’s ability to compete with the United States and China. In an interview with CNBC, Klein said that while it is critical to address the risks associated with AI, imposing stringent regulations during the technology’s development phase could prove harmful.
He stressed the importance of focusing on the results generated by AI implementations rather than the technology itself. “We need to ensure that the algorithms we develop and the AI applications we integrate into companies produce positive outcomes for employees and society as a whole,” he noted during the interview on CNBC’s “Squawk Box Europe.” Klein also questioned how European startups can thrive in a highly regulated environment compared to their counterparts in regions with more lenient regulations.
Klein’s perspective highlights a broader debate in Europe about balancing innovation and security. He favors a unified European strategy that prioritizes addressing significant challenges such as the energy crisis and digital transformation, rather than imposing further regulatory constraints on technology.
The timing of Klein’s comments coincided with SAP’s robust third-quarter earnings report, which revealed a significant increase in revenue. The company reported earnings of 8.5 billion euros (about $9.2 billion) for the quarter, marking 9% year-over-year growth, driven largely by a 25% increase in cloud product sales . Following this announcement, SAP shares saw a notable increase, reaching an all-time high.
Looking ahead, SAP adjusted its forecast for 2024, forecasting increased revenue from cloud services and software, along with improved operating profit and free cash flow. Over the past decade, SAP has made a strategic transition to cloud computing, a move that gained momentum after its acquisition of Concur, a business travel and expense management platform, in 2016.
In response to current macroeconomic challenges, including rising interest rates that have impacted technology spending, SAP has placed a strong emphasis on artificial intelligence as a key component of its growth strategy. Earlier this year, the company unveiled a restructuring plan that will affect more than 7% of its global workforce, translating into approximately 8,000 positions, as part of its adaptation to the changing market landscape.
Klein’s insights into AI regulation and SAP’s financial performance reflect a pivotal moment for the company and the technology sector in Europe in general. As discussions around AI governance continue, the need for a balanced approach that promotes innovation while ensuring safety remains a critical topic for industry leaders.
