SAP CEO: AI Won't Kill Software, But It Will Change Your Job — With Christian Klein

Alex Kantrowitz (0:00)

Now that the SaaSpocalypse is over or paused, software is booming. What's happening? Let's talk about it with the CEO of Europe's largest software company right after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era.

Then, I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial, to go inside a large-scale agentic CX transformation, including the business decisions, trade-offs and lessons along the way. You can watch both conversations now on my YouTube channel today.

Welcome to Big Technology Podcast, a show for cool-headed and nuanced conversation of the tech world and beyond. We have a great show for you today. Today, we're joined by the CEO of SAP, Christian Klein, who is here to talk with us about the state of software amid all these SaaS-pocalypse worries and along with some other big decisions that software companies are faced with today. Everything from hiring to the integration of artificial intelligence and more. Great to see you. Welcome to the show.

Christian Klein (1:13)

What a great introduction. Thanks for having me, Alex.

Alex Kantrowitz (1:16)

Okay. So, you know, we talk a lot about software on the show and AI on the show, and we don't really have to, you know, we say we think AI is going to do this or that. You know, we don't have to make any planning decisions based off it. We just talk about it on the next show. You on the other hand, you do need to make planning decisions. You have to basically decide, and this is why I think this could be such an interesting conversation. You have to basically decide what you think the trajectory of AI's progress is going to be, and then you plan based on top of it. Because if AI stops now, it's one set of decisions, if AI keeps going a little bit, but then hits a wall, it's another set of decisions. And if we go into recursive self-improvement, it's a third set. Each one of these impacts your business dramatically. So actually, you make the choice, and then you run a company based off of it.

I think that AI has to hit a wall at some point. We've seen great progress, progress that's gone through many walls that people put up, or presumed walls, and it's continued to build, but it can't keep going on like this forever.

What do you think? Do you think we're about to hit like recursive self-improvement, or do you think that what I'm saying makes a little sense?

Christian Klein (2:32)

Yeah. I'm happy to answer that question, and let me maybe just describe it, how I describe it to my employees. When we do an all-hands, I always show them a mountain. I said, look, we climbed the cloud mountain, we did a cloud transformation, and then now we have to climb the AI mountain. On this journey, there will be obstacles there, we have to overcome, AI has to overcome.

When all of this hype started with Generative AI, of course, everyone was using all these LLM models and start testing it, experimenting with it, and now it's really about, okay, but it's nice to experiment with it, but all of our customers are saying, okay, but what is in it? Show me the value.

Why does AI understand so much, all the unstructured documents? I can summarize a mail, I can summarize a document and so on, but what about the business? Why does this there are always certain limits with the accuracy? That is the first obstacle we have to overcome. The third one, I guess, the world is talking about that. Do we need to regulate AI? Do we need to govern AI? Because obviously, when you're running the world's most mission critical businesses, I mean, obviously governance plays a huge role, and this is where I would say these are the kinds of obstacles we have to overcome to further climb up the mountain.

Alex Kantrowitz (3:46)

Okay, well, Christian, this is kind of the core question here. Yeah, all right. AI doesn't understand structured data that well right now, I think.

But your job is basically, a big part of your job is assessing whether the technology will be making those leaps in the future. So we could talk a lot about what the current state of AI is, and we will. But for you to run the company, let's say AI, for instance, it's really good at going into ERP and being able to make serious calculations about things, which it's getting better at.