SAP to Embed ChatGPT in Products as Quarterly Revenue Beats Expectations
German software group SAP has reported Q1-2023 revenue above what analysts had expected, backed by growth in its cloud business. It has, however, lowered its outlook for the entire year due to the divestment of its Qualtrics unit. SAP, which in January had announced cutting 3,000 jobs as part of its cost-cutting measures, said it plans to use artificial intelligence technologies like generative AI in its products to better serve its clients.
SAP CEO Christian Klein said that the company was working with Microsoft Corp-backed OpenAI's chatbot ChatGPT, which can provide human-like responses to questions, and that the integration of over 50 AI use cases with SAP technology would be available to customers next month after its annual Sapphire conference. SAP is confident that the use of AI can benefit its clients, but it is aware of the potential biases and misuse of technology and has set up an internal committee comprising customers, researchers, and analysts to assess and guard against AI misuse, Mr Klein said.
Jefferies analysts wrote in a client note that SAP's "underlying guidance is essentially unchanged, although updated to reflect the disposal of Qualtrics." SAP's revenue from its lucrative cloud business grew faster than expected, increasing 24% YoY, but cloud revenue forecast for the year is down by €1.3bn to between €14bn and €14.4bn.
