SAP Just Partnered With OpenAI--And It Could Change the Future of AI in Europe

SAP SAP is stepping up its AI ambitions with a strategic move to anchor itself in Europe's sovereignty debate. The company announced a partnership with OpenAI that will bring ChatGPT and other services to Germany's public sector under a program called OpenAI for Germany. These offerings will run through SAP's Delos Cloud, which stores data locally in compliance with European laws, positioning SAP as a trusted intermediary between governments and generative AI providers. Unlike OpenAI's Stargate infrastructure expansions in the UK and Norway, this initiative did not include commitments to build data centers or provide capital investment, underscoring SAP's focus on compliance and delivery rather than infrastructure.

Alongside OpenAI, SAP struck a separate agreement with Amazon AMZN Web Services to make its sovereign cloud offering available through AWS. European officials have been pressing for tighter control over AI and cloud infrastructure, and SAP appears to be aligning its strategy with that demand. Management has already committed around 20 billion to sovereign services, reflecting the scale of the opportunity. Cloud revenue for SAP is projected to reach nearly 22 billion, almost triple the level seen in 2019, though the company does not disclose specific results for Delos Cloud, which operates on Microsoft Azure. SAP has also built credibility in the AI space through investments in challengers such as Aleph Alpha, Cohere, and Anthropic, giving it exposure to the broader ecosystem.

Markets reacted positively to the announcements. SAP's shares rose 2.2% to 231.25 in Frankfurt on Wednesday afternoon, even though the stock remains down 2.1% for the year. Investors may view these partnerships as a signal that SAP is determined to embed itself in Europe's AI and sovereignty strategy at a time when demand for generative AI is expanding rapidly. For Europe's largest software company, the combination of government-focused AI offerings and sovereign cloud services could become a meaningful driver of growth as enterprises and states look for secure solutions to navigate the next phase of digital adoption.