SAP CEO Challenges Nvidia on Europe's AI Strategy

SAP Chief Executive Officer Christian Klein has expressed skepticism about the idea that Europe needs to build more data centers equipped with high-powered chips to keep up with the rest of the world. During a press call from SAP’s headquarters in Walldorf, Germany, Klein criticized comments made by Nvidia CEO Jensen Huang during his recent European tour.

“Is it really that we need to build five data centers and put great chips in there? Is this what Europe needs? I doubt it,” Klein said, challenging Huang’s assertion that Europe is falling behind in artificial intelligence due to insufficient computing power.

Huang, whose company leads the market for AI chips, announced several partnerships during his visit to help construct AI infrastructure in Europe, all based on Nvidia’s technology. He urged European leaders to invest heavily in data processing power, similar to the investments made by US tech giants.

Klein, however, believes that Europe’s strength lies in its industrial base, including automotive, manufacturing, chemicals, and engineering, rather than competing with American tech companies in raw computing power. He advocates for Europe to focus on developing AI applications that serve its core industries, rather than emulating Silicon Valley’s hardware-first approach.

Klein’s statements mark a significant shift in SAP’s AI strategy. Just six months ago, he supported Europe building its own AI “gigafactories.” However, discussions with other German companies to invest in EU-backed AI gigafactories broke down due to differing visions and short-term views.

SAP has since clarified that it is no longer interested in investing in or participating operationally in such mega-projects. Instead, it aims to support these initiatives as a tech and software provider, offering tools, platforms, and customizable AI applications.

Klein also questioned the long-term value of training large proprietary AI models, suggesting a shift towards cheaper, open-source alternatives. He cited the success of the Chinese company DeepSeek, which used open-source code to develop an AI model at a fraction of the cost of its US competitors.

Klein emphasized that effective AI solutions do not require unlimited computing power or billion-dollar budgets. He believes that the focus should be on intelligent, streamlined models that are relevant to the market and function well in real business environments.

SAP’s priority is to integrate AI capabilities into enterprise software systems, with applications such as AI-augmented workflows for logistics, predictive maintenance for factory equipment, intelligent customer service bots, and real-time decision-making dashboards for supply chain managers.