The group has been investing in AI for several years.
(Photo: IMAGO/Revierfoto)
Dusseldorf Dax group SAP wants to secure access to future technologies through investments in three start-ups. The largest German software manufacturer has announced “strategic investments” in the German company Aleph Alpha and its US competitors Anthropic and Cohere. All three are developing generative artificial intelligence (AI) that can process and create content, such as text.
The aim of the investments is to integrate the company’s technology into its own portfolio, SAP explained on Tuesday – i.e. to improve its own offer. Strategy chief Sebastian Steinhäuser told Handelsblatt: “In our strategy, we are relying more on an open ecosystem than in the past. This also applies to artificial intelligence.”
SAP did not make public the amount of the holdings or the valuation of the companies. The software manufacturer is not the largest investor in the financing rounds, Steinhäuser said: “We are making these investments in a targeted manner in order to raise the partnerships with the companies to a strategic level.”
According to Handelsblatt information from financial circles at the end of June, Aleph Alpha will receive more than 100 million euros, with Intel Capital being the main investor with a share of 25 million euros. SAP is contributing around ten million euros. The chip manufacturer Nvidia also participates in the technology provider. The companies did not comment on the information.
Anthropic announced a $450 million round of funding in May, with investors including venture capitalist Spark Capital, Google, and the investment vehicles Salesforce and Zoom. Finally, Cohere received $270 million from Salesforce, Oracle and Nvidia in early June.
The partnerships are well-known: the two US companies are among the leading providers of generative AI in the industry. The Heidelberg start-up Aleph Alpha has made a name for itself in the German market.
Digital assistants for controlling and logistics
The three young companies are developing so-called large language models, in technical jargon Large Language Models (LLM). They are able to deal with texts at human level and, for example, answer questions, summarize articles and create presentations. Experts therefore refer to the technology as generative AI.
The manager considers artificial intelligence to be a major growth driver.
(Photo: Bert Bostelmann / picture folio for Handelsblatt)
SAP has been investing in AI for several years, according to CEO Klein “a larger three-digit million amount” every year. The software manufacturer has integrated the various technologies in 130 scenarios into its products, which more than 26,000 customers use – for example, to detect anomalies in production or to forecast customer behavior.
Generative AI opens up completely new application possibilities, Klein speaks of an “enormous growth driver”. For example, the group wants to develop digital assistants for areas such as controlling or logistics and facilitate the automation of business processes – right down to systems that configure themselves.
>> Read here: How SAP boss Klein wants to use generative AI
In product development, SAP focuses on the applications. The software manufacturer is researching some basic models for generative AI, for example for the use of financial data. In many scenarios, however, the technology of other providers should be used. So far, the partners have included Microsoft, IBM and Google.
A billion dollars in venture capital
The start-ups should contribute to this construct. Anthropic, for example, has developed a chatbot called Claude that generates program code from input in natural language, automates processes and, in the latest version, solves math problems. In addition, the system can be based on basic principles such as reliability and security.
Cohere specializes in generative AI for business customers and promises careful handling of sensitive data. Aleph Alpha, in turn, enables customers to use the technology in their own data center. The start-up is also working intensively on explaining the results. Transparency and stability have so far been two major construction sites of AI.
Such qualities are particularly important for SAP. Strategy chief Steinhäuser: “Artificial intelligence from SAP must be absolutely reliable – customers must be able to trust that the results are correct and that the highest standards are used when using data.”
Further investments in start-ups are likely to follow. For example, via the venture capitalist Sapphire Ventures, which SAP finances: The fund wants to increase investments in software manufacturers with a focus on artificial intelligence to “more than one billion dollars”, as he announced last week.
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