Christian Klein, co-CEO of German software and cloud computing giant SAP, speaks during a press conference to present SAP's 2019 financial results on January 28, 2020 in Walldorf, southwest Germany. – German software giant SAP reported earnings hit by high restructuring costs, but raised forecasts for next year.
Daniel Roland | AFP | Getty Images
Europe should avoid regulating artificial intelligence and instead focus its attention on the technology's results, according to the CEO of the German enterprise tech giant JUICE said CNBC on Tuesday.
Christian Klein, who has held the top job at SAP since April 2020, said Europe risks falling behind the US and China if it over-regulates the AI sector.
Although it is important to mitigate the risks associated with AI, Klein argued that it would be misguided to regulate the technology while it is still in its infancy.
“It is very important that the way we train our algorithms, the AI use cases that we integrate into our customers’ businesses – they have to deliver the right result for employees and for society,” Klein said on Tuesday on CNBC's “Squawk Box Europe.” .
“If you only regulate technology in Europe, how can our startups here in Europe compete with the other startups in China, in Asia, in the USA?” Klein added.
“Especially for the startup scene here in Europe, it is very important to think about the results of the technology, but not to regulate the AI technology itself.”
Instead, Klein argued, companies need a more harmonized, pan-European approach to pressing problems such as the energy crisis and digital transformation – and less regulation overall, not more.
Pleasing result
His comments came after SAP reported record third-quarter profits late Monday. Shares of the software provider rose more than 4% to a record high.
The software giant reported total revenue of 8.5 billion euros ($9.2 billion) in the quarter, up 9% year-on-year, as cloud product sales rose 25%.
SAP has raised its outlook for cloud and software revenue, operating profit and free cash flow for 2024. The German company has been working towards the transition to cloud computing over the last decade.
In 2016, SAP acquired Concur, the corporate travel and expense platform, in hopes that the software would move to the cloud.
More recently, SAP has made AI a key focus of its strategy to reposition itself for faster growth after higher interest rates and macroeconomic headwinds depressed technology spending and led to industry-wide layoffs.
In January, SAP announced a restructuring plan affecting over 7% of its global workforce – or the equivalent of 8,000 jobs.