
Published on
January 31, 2025
The emerging frontier of business AI
January 30, 2025
Everyday artificial intelligence applications – such as digital assistants on our phones, photo editing apps, or ChatGPT – are a constant source of fascination. However, the real “emerging frontier” of AI – to quote a key theme of this year’s World Governments Summit in Dubai – lies elsewhere. It lies in embedding AI deeply into the processes of business and public administration, and in using it for the modernization and competitiveness of our economies. At SAP, we refer to this as "Business AI."
Business AI provides companies and the public sector with ways to respond to intense transformational pressure by automating critical processes. It enables them to adapt more quickly and successfully to new conditions that arise from changing markets, volatile geopolitics, and evolving sustainability requirements.
Why Some Organizations Still Hesitate
Even at this early stage, it’s already clear that the industrial use of AI will revolutionize all sectors, but many organizations still hesitate. Why is that?
Three major impediments to the adoption of business AI repeatedly emerge.
First, concerns about data security and the quality and accuracy of AI results are frequently mentioned. The background to these concerns is clear: There is no room for errors in the critical processes of business and government.
It is thus clear that businesses and public administration alike need AI applications that understands their specific data in the finest detail, deliver highly reliable results, and integrate directly into software that enterprises and governments run on. And this is precisely what Business AI is designed to deliver.
The second impediment is the concern that AI is evolving so rapidly that solutions bought today might be obsolete tomorrow. This concern is also easy to dispel: When business processes run in the cloud, organizations have immediate access to the latest AI innovations. Updates can be performed quickly and at low cost, just like a software update on a smartphone.
These concerns, too, are easy to dispel: As long as business processes run in the cloud, companies have immediate access to the latest AI innovations. In the cloud, updates can be performed quickly and at low cost, just like a software update on a smartphone.
The third impediment for businesses and the public sector alike is that cloud adoption is a necessary foundation for strong AI solutions. This is because only in the cloud can AI work with high quality data, scale, and operate cost-effectively. One could say that AI without the cloud is like having a race car without good roads – you could still drive, but certainly not very fast or far.
For this reason, SAP follows a strategy of bringing companies to the cloud first and modernizing their IT processes before embedding AI solutions directly into the cloud software.
What is Already Possible Today
A large proportion of global trade runs on SAP software. Over the past two years, we have infused Business AI across our cloud portfolio. It is as if the operating system of the world economy is getting a massive productivity update.
We estimate that, when fully implemented, SAP’s 300 million users worldwide could improve their productivity by up to 20 percent. This underscores the enormous potential of AI for business applications-and it’s just the beginning.
Joule, our AI assistant, can access the process and business data of the company where it is installed - the data sovereignty remains with the client. In addition, our AI solutions do not require lengthy configuration or training. We have developed and implemented over 100 specialized use cases since the end of 2023. Through partnerships with NVIDIA, Microsoft and OpenAI, Google, and Mistral, we also enable our customers and partners to program their own AI apps based on their choice of AI technology.
Business AI can, for example, help better predict customer demand and quickly respond to disruptions in the supply chain. It can simplify and optimize visual inspection processes and support developers by making it easier and faster to find errors. It can automatically read, capture, and review millions of documents when goods are received or leave a facility, thereby delivering big savings in terms of time and costs. AI can also help measure and calculate the CO2 emissions of products and processes more accurately - helping companies make faster, more targeted decisions for enhanced sustainability.
What it Takes to Fully Exploit the Potential of Industrial AI
Businesses today have many good reasons to leverage the cloud and AI technology for their own benefit. Governments can additionally encourage technology adoption, though, and several countries in the Middle East are already setting good examples of this.
First, governments can prioritize investment in AI-related research, development, and public-private partnerships. And they can invest in local AI talent – for example through partnerships with universities, global tech leaders and local organization to deliver as well as with scholarships and upskilling programs.
Second, countries can design comprehensive AI and cloud strategies, thereby driving a common understanding between all actors involved with regard to priorities, timing, and measurable goals.
Third, governments can establish regulatory sandboxes with flexible data governance policies – as a smart way to encourage exponential innovation while safeguarding data protection and data residency.
Fourth, the digital transformation of public service, supported by public-private partnerships, can serve as a lighthouse demonstrating the benefits of the cloud and AI, to citizens and industry alike. Countries such as the UAE and KSA have already been adept at this.
Finally, we need to consider the creation of effective ecosystems. In Business AI, as in previous chapters of the digital revolution, the best ecosystem will prevail. An ecosystem is typically composed of leading tech and industry companies, universities, startups, and government actors. A key question, therefore, is whether countries can help facilitate innovative ecosystems that enable Business AI to thrive.
One example of how it can work is the SAP Innovation Hub in Khobar, Saudi Arabia, which opened in 2024. The hub brings together SAP’s global and regional cloud and AI experts, nearby companies, startups and partners in a vibrant community of co-innovation where new ideas and approaches are tested and honed against practical business challenges. It spans multiple key industries including oil and gas, energy, and manufacturing, as well as the public sector. An innovation lab along similar lines is currently being established in the UAE.
All in all, Business AI represents perhaps the greatest economic opportunity of our generation – for individuals, nations, and on the global level. We can make our societies more productive, more robust, more sustainable. Let's seize this tremendous chance.