SAP confident of new job creation by AI | Company Business News

German software-maker SAP SE is confident that artificial intelligence (AI) will create new jobs even as the rise of the new technology casts a shadow on jobs done by humans.

“We believe AI will create more jobs by increasing productivity. We are working with our partners to leverage AI and increase the productivity of our projects,” said Muhammad Alam, member of the executive board for product engineering at SAP at the company’s roundtable with the media in its research and development (R&D) lab in Bengaluru on Wednesday.

“AI helps us accelerate migrations and decrease implementation costs, further driving our business growth,” said Alam.

Chief executive Christian Klein echoed a similar opinion, stating that the need for developers will increase as AI-fuelled business grows, which would increase the development workforce in India.

“In India, your economy is so rapidly diversifying, and all of these customers need software; that’s the good place to be in tech,” said Klein, who took over as chief executive in April 2020 in his interaction with the media. “Now we can code this software faster, be more productive, but we have to code more software. And as long as this is the case, we will also further invest. And also here, the development workforce in India will further increase.”

“While it may seem that AI will reduce the number of people to do a certain task, we need to see that because of AI, there is more work opening up across multiple technologies,” said Ashutosh Sharma, vice-president and research director at Forrester Research. He added that tech spends will increase across organisations and AI will be instrumental in creating new jobs that emerge from companies investing in new technologies that AI enables.

SAP is a Walldorf, Germany-headquartered software maker that arms the world’s largest firms with software that can manage their business processes including human resources, finances, supply chain management, and inventories.

The SAP board’s buoyant remarks on AI contrast with those of Google-parent Alphabet Inc’s chief executive Sundar Pichai, whose comments in the company’s post-earnings conference call with analysts put alarm bells on jobs of coders.

“We’re also using AI internally to improve our coding processes, which is boosting productivity and efficiency. Today, more than a quarter of all new code at Google is generated by AI, then reviewed and accepted by engineers,” said Pichai in the call with analysts on 29 October after the company announced its financial results for the quarter ended September 2024.

At home in India, chief executives of the country’s largest software services companies have sought to assuage investor concerns over the threat to jobs posed by generative AI (GenAI).

“ChatGPT created a lot of early interest. But people are slowly realizing that it is most useful for a class of problems. People are realizing that it will not take away all the jobs—humans would be required,” said K. Krithivasan, CEO of Tata Consultancy Services Ltd, which is India’s largest software services company, in an interview with Mint on 12 July.

ChatGPT’s launch about two years ago shot GenAI to fame and also into company boardroom discussions with its content generation abilities in video, audio and written form.

Krithivasan’s peer Salil Parekh, who is the CEO of Infosys Ltd, voiced a similar opinion. “So, at this stage, my sense is that the (AI) technology will help business to grow even further as opposed to anything else. We don’t see any layoffs in Infosys with these new-age technologies,” said Parekh in an interview to PTI on 26 August.

These comments are significant for India, which sees at least a million engineering students graduate every year. This leap in demand from the new technology will lead to a change in skillset required by graduates.

Prompt engineers, which is an industry term for coders adept in instructing AI models to generate the best results, is gaining demand from large companies that are keen on hiring talent equipped with GenAI-ready skillsets, Mint reported on 13 March.

For now, the benefits of AI are still not clear because most homegrown companies are shying away from disclosing their revenues from the new technology, unlike global peers Accenture Plc and IBM Corp.

While IBM’s book of business – bookings and actual sales – related to GenAI stood at more than $2 billion as of July 2024, Accenture, which is the world’s largest software services company, reported $3 billion in Gen AI bookings for the financial year ended August 2024.

Infosys chairman Nandan Nilekani in his address to shareholders at the company’s 43rd annual general meeting said that the embrace of Gen AI in large companies will be slower than in consumer-facing companies.

“The world is at the very early stages of the AI revolution, and unlike the consumer AI, which will roll out quickly, enterprise AI requires companies to do major changes inside the companies, organize their data, build responsible systems, follow the laws of many countries, and so on. So, enterprise AI will take several years to unfold,” said Nilekani on 1 July 2024.

For SAP, a little more than half of its revenue is fuelled by its cloud business. The company reported $9.06 billion in revenue for the July-September 2024 period of which its cloud business alone made up $4.66 billion.