SAP Replaces Costly AI Models With Cheaper Alternatives, Targets Over €2 Billion in Efficiency Gains

SAP is replacing some of the most expensive artificial-intelligence models powering its products with lower-cost alternatives, a move the German software maker expects to generate more than €2 billion in efficiency gains over the next two years. CFO Dominik Asam told Reuters the company removed costly models from products including its internal consulting assistant, substituting cheaper options where performance remained strong. SAP uses more than 70 AI models from providers including OpenAI, Anthropic and Google, and increasingly selects the cheapest model meeting a task's required standard. Asam said overall AI spending is still expected to rise as adoption grows. "The goal is healthy margins as scale grows, not an absolute reduction in AI expenditure," SAP said. Because SAP charges customers for completed tasks rather than underlying computing resources, lower operating costs can improve profitability. Asam added that regulated-industry and government customers increasingly set requirements on model origin, with European clients demanding local solutions.