SAP replaces costly AI models with cheaper ones, targeting over €2 billion in gains

SAP said on Oct 28 that it is replacing some of the most expensive AI models in its products with cheaper alternatives. The software maker expects the switch to generate more than €2 billion in efficiency gains over the next two years, Chief Financial Officer Dominik Asam told Reuters.

SAP has already removed some of the costliest models from products including its internal consulting assistant, using lower-cost models where performance stayed strong. The company said the goal is healthy margins as AI use grows, not a cut in total AI spending, which Asam expects to keep rising as adoption grows.

How SAP picks models

SAP uses more than 70 AI models from providers including OpenAI, Anthropic and Google. Asam said the company increasingly chooses the cheapest model that can do a task to the required standard.

Unlike many AI providers, SAP charges customers for completed tasks rather than for the computing used to generate each response, so lower operating costs can help improve its profitability.

Asam said government agencies and companies in regulated industries increasingly set requirements that exclude models based on where they come from. European customers increasingly ask for local options.

Who is exposed

Alphabet's Google is among the listed model providers SAP uses; OpenAI and Anthropic are privately held. Reuters did not say which providers' models SAP removed.

What comes next

SAP reported third-quarter results on Oct 21, with cloud revenue up 26% and its current cloud backlog at €24.1 billion, up 28%. It reports fourth-quarter and full-year 2026 results on Jan 28, 2027.