AI Investment Boost: SAP Funds Anthropic, Cohere, and Aleph Alpha

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0:40And what's really interesting about this is they're picking big players that they believe can help within their company. They believe that they can use these as tools when they're consulting other firms. But what's really interesting is all of these companies have recently done rounds of funding and they don't currently have an open round of funding, right? They're not doing their series A, B, C, D, whatever. These are ones that have recently closed rounds and it would appear that this investment is kind of just money on the top, which is really interesting. I think this really speaks to the froth in the market when you have a pre-built AI model that's doing very well.

1:13Essentially, you're kind of the front runner in your market segment. You have a niche that's kind of cornered and you're seeing these big firms that want to partner with somebody that you'd see you as the leader that just want to give you money, which is really, really interesting to kind of be part of it. So I think what's really interesting here is the fact that this really shows SAP's eagerness to be part of the AI revolution, because I really think that this is something that promises to rewrite the rules of enterprise tech and SAP can see that. So SAP hasn't actually given any details on this new round of funding.

1:44However, they say that they align well with SAP's pledge to funnel over a billion dollars into AI-enabled enterprise tech ventures via Sapphire Ventures, which is an enterprise-focused VC arm. So what are the companies exactly that SAP is invested in? So SAP has invested in Anthropic, Cohere, and Alpha Alpha. So Anthropic, obviously, a very big company, recently received$300 million from Google Cloud to run on the Google Cloud. They famously have taken money from FTX, Sam Bankman-Fried, who helped lead a massive round for them. and so I think it's really interesting that we have you know these these anthropic co here these are like major names in AI they're very well known and so I think it's really interesting that even though they've you know recently done rounds of funding they're still kind of taking undisclosed funding on the top from some of these firms so SAP's annual Sapphire conference also kind of shone a spotlight on its internal AI endeavors so among them a digital assistant as part of its customer experience suite.

2:55So SAP is currently building some in-house AI tools, which I think, you know, really would make them interested in partnering with these other people, invested in them, and making sure that they're, you know, included in their tech stack, which they are then able to resell. So SAP's chief strategy officer, Sebastian Stenheiser, he was really emphatic about the company's vision. He said, quote, we're at a watershed moment with generative AI poised to fundamentally change how businesses run. He also commented on, he also committed to the fact that he is going to be forging a future where, you know, this generative AI is really put into all of SAP's existing portfolio.

3:35And the goal is to really empower customers to unleash their full potential. So all three recipients of SAP's backing are really, you know, big in, um, big in the space they're very well aligned with sap's strategy at the moment because sap really focuses on sales services and commerce which are all very big areas that are inevitably going to be quite disrupted when it comes to ai and what that is able to do so anthropic currently is building claude if you haven't heard about it it's launched it's a competitor to chat chippy t it's actually a very um popular and powerful ai model the thing i like about claude is just the fact that it can take in a ton of data so you can upload a pdf that is like 200 pages long and ask it questions about that really really impressive not something you know you could do with chat chapt and so i think it's really equipped well to tackle a whole bunch of b2b tasks from answering queries and coding to you know streamlining workflows and processing text cohere on the other hand has developed a generative text platform that's cloud agnostic and also secure so it's kind of its big claim to fame.

4:46And it can be displayed on pre-mise or on virtual private clouds, which is, you know, quite useful. And I think just the fact that it's cloud agnostic is just a really big draw for a lot of people. So yeah, just depending on the company's data location. So Alpha Alpha is a partner of SAP, and it designs and hosts multi-model, multi-lingual models. And it really has an eye focused on interoperability, data privacy, and security. So Martin Kahn, who's Cohere's president and COO, he was really excited about working with SAP, and he described the partnership as a, quote, obvious fit. And he said that this is because, you know, their shared European heritage and Cohere's aspirations in the region.

5:32So, you know, he's kind of playing up the fact that they're from Europe, he's from Europe, so they'd be a great partner, which, I mean, is obviously a ridiculous reason. But, you know, maybe it's not so ridiculous because maybe Cohere does understand a little bit more of the European market than other companies, and so it will have a unique advantage there. Who knows? In any case, typically I would say the tech that the company is creating is the reason why they would be a great fit. But anyways, I'm not trying to take a dig at Cohere. It is a great company. So he said, quote, This investment builds on our existing enterprise collaborations with Oracle, McKinsey, NVIDIA, Salesforce, Sentiel One, and others as we bring our independent cloud-agnostic data-secure approach to generative AI to enterprises globally.

6:16Honestly, Cohear has done a lot of partnerships with a lot of big companies, as you heard there in the list. So this is not the first. Cohear is a well-known name, well-respected AI company that has done a lot. um alpha alpha and anthropic were not immediately available to comment um to a tuck crunch reporter after this whole thing came out but sap's investment i think is a pretty significant step amid this whole increasing gravitation of you know consulting giants towards generative ai a censure for instance has you know committed over three billion dollars to ai investments over the next three years so that's just one of these consulting firms that is getting really heavy into this.

6:56And so I think this move by SAP is just, you know, keeping up with Accenture and also obviously making sure that they're very competitive. Companies that want consultants obviously want them to know how to integrate AI. This is the hottest topic. And the problem with a lot of these enterprises is they may not know the best ways to integrate AI into their, you know, platforms. And so if companies like Accenture and SAP were not integrating and focusing heavily on AI, I think they would completely get beat by the others because this is the number one place that companies want consulting in right now.

7:28In addition to this, I think the fact that, you know, Accenture, they raised that$3 billion, but they're also planning on hiring an AI-centric consulting workforce of 80 ,000 people. Meanwhile, you have PwC, who is not wanting to get left behind. They pledged a similar amount to enhance its AI solutions, somewhere around$3 billion, I believe. And that includes partnerships with Microsoft for enterprise grade applications of OpenAI's GPT-4 and ChatGPT. So those enterprise grade applications, obviously, Microsoft has a new product with Microsoft Azure where you're able to host ChatGPT and have your own exclusive kind of ChatGPT server that's not going to leak any of your company's data.

8:11And so that's kind of what I think PWC is going to be focusing on working with. In addition, McKinsey's recent partnership with cohere i think really aims to kind of enhance enterprise adoption of generative ai they estimated that generative ai could add a 4.4 trillion dollars annually to the global economy which is you know similar to creating a brand new economy the size of the united kingdom so i think some industry watchers are still going to be a little bit cautious against you know these kind of exuberant ai predictions um because you know some people are saying this has echoes of the 90s tech bubble but you know with any industry i think only time is going to tell who the real winners in this ai race is going to be but i think this is a big play um into some big companies and as we see these things um just getting more and more integrated into all sorts of firms i think that this is going to be a pretty massive step in innovation that we're seeing coming out of ai