SAP CEO Christian Klein argues that the next winners in artificial intelligence may not be those building the biggest models or investing the most in chips and data centers. Instead, he believes the future lies in teaching AI how businesses actually operate.
The commoditization of large language models
According to Klein, large language models are steadily becoming commoditized. The first phase of AI was about infrastructure, chips, and models, but the next phase is different. The question is no longer who has the biggest model, but who can teach AI how businesses run. This shift could create a significant opportunity for India.
India's potential in the next AI phase
For the past three years, the AI conversation has been dominated by companies like OpenAI and Anthropic, along with chipmakers. Countries have been judged by whether they produced a world-class foundation model, and India has often been portrayed as lagging. Klein sees it differently. As AI moves beyond chatbots into business operations, attributes like understanding supply chains, finance, manufacturing, and regulation become valuable. Simply training a model on public information is no longer enough; AI must be taught how supply chains work, how factories operate, and how companies comply with regulations.
The autonomous enterprise vision
SAP is building what it calls the "autonomous enterprise." Instead of AI assistants that answer questions, SAP wants AI agents that perform business tasks like financial closing, inventory optimization, and contract reviews. These agents are trained on decades of enterprise data. Klein notes that no one at SAP checks contracts anymore; that is all done by AI. However, he does not see foundation model companies as competitors, stating that both SAP's AI and an LLM are needed for successful AI application.
Implications for Indian IT
Klein believes the rise of generative AI will transform, not threaten, the Indian IT services industry. Companies adopting AI will need partners who understand both technology and business operations. Indian firms have deep expertise in banking, manufacturing, logistics, and healthcare, which could become a major advantage as AI becomes more embedded in business.
Skills shift and SAP's India focus
SAP is increasingly hiring data scientists and AI specialists rather than traditional software developers. Klein emphasizes that technical skills alone are not enough; understanding business problems is key. SAP's India operations are central to its strategy. The company recently opened a second Bengaluru campus, and India is now SAP's largest development center globally with about 17,000 employees. Indian teams have complete ownership of products and AI innovation. SAP plans to bring its global leadership team to Bengaluru in January and is working with Indian partners like TCS and the Adani Group on sovereign cloud initiatives.
