Sebastian Steinhaeuser, the COO of SAP
UNDERMINE
SAP organizes two major conferences each year for customers, prospects and partners. This year’s Sapphire conferences were in Orlando and Madrid. As was the case at Sapphire Orlando, almost all of the messages in Madrid focused on their approach to artificial intelligence. While SAP is the world’s largest provider of business software, it positions itself not just as a provider of business software but as a provider of artificial intelligence governance solutions.
I had the opportunity to interview Sebastian Steinhaeuser, SAP’s Chief Operating Officer, at the Madrid conference. Our discussion focused on AI. The transcript has been edited for brevity and clarity.
Steve Bunker: Many of the conferences were very technical. This is AI technology. That’s how we’ll manage it. This is the stack. I would like to approach it on a more philosophical level.
As you grow older, you begin to worry about the world you are leaving to your children. And to be honest, my biggest fear is AI. And it’s not Terminator. They are jobs. I can see AI easily wiping out 20% of jobs worldwide.
I follow the supply chain. We have autonomous trucks. Elon Musk is trying to build an autonomous humanoid robot capable of doing everything a human can in a warehouse or factory. I know there is an argument that when one set of jobs is eliminated, other jobs always arise. But we have never seen an automation revolution in which 20% of jobs could be eliminated. Maybe I’m too pessimistic. This is something that doesn’t seem to be addressed at any of these software conferences.
Sebastian Steinhauser: I think about this a lot. I am responsible for our team as we journey to scale a standalone business.
My point is that the short-term impact of technology-driven work disruptions is overestimated, while the long-term impact is underestimated or completely underestimated. Technology always takes time to be adopted. I think this will be a much faster adoption than the previous cycles – each cycle gets faster and faster.
So in the long run, there is an example that I really love. Two of my good friends are radiologists. They finished their studies in the mid-2000s. For the first time in this field, imaging artificial intelligence became available. This was one of the first real cases of using artificial intelligence – AI for image recognition. It was clear that it solved a problem. It was only a matter of time before artificial intelligence took over the majority of diagnoses. My two friends were very worried about going to this field. In Germany at that time you had to invest money to buy the expensive equipment. And they asked, “Should we?” Maybe there are no radiologists.
And the prediction was absolutely correct. AI now handles, I think, 95% or more of all diagnoses. But we have more radiologists, not fewer!
What happened? We had completely underestimated the demand for scans. The number of scans just went through the roof. I’m not saying this will apply to all jobs. It’s just an example of how difficult short, medium and long term predictions are. But for them, in their 20-year career, they are happy.
It is very difficult to judge. I think some of the fear is exaggerated.
One field heavily influenced by artificial intelligence is computer science. We still need computer scientists. You still need an architectural understanding of the software. It’s not just about being able to code a jogging app. Businesses need to understand how to develop an enterprise-grade, secure, mission-critical system, and how to build and architect it.
But of course, the programmer’s job will change completely. Some parts of the job will disappear entirely. Other parts will become much more important: creative thinking, understanding the customer and how to turn customer requirements into a specification. But beyond that, everything from there will be largely handled by AI.
Architectural thinking will become more important. UX (the user interface) may no longer matter because AI generates everything on the fly, as we demonstrated here at the conference.
But does that mean there will be no more developers? I would tell my kids, “Don’t study computer science.” I don’t think so. Because I believe the amount of code that can still be written is infinite. The number of things we can still do with code is infinite.
So it’s very hard for me to judge. At SAP, as we successfully sell more software and deliver more solutions to solve more problems, then coding AI is a gift, not a curse, for our developers.
But then, in the long run, it’s just very hard to judge.
And of course, there are other famous examples, such as telephone switchboard operators. I think the peak of employment for these carriers was 10 years after the invention of telephones that did not require a switchboard. But now, the job is no more.
I am optimistic. I would never bet against people finding a purpose in life to do something that is fulfilling and useful. now and 50 years from now.
However, I would expect there to be sectors and types of jobs where there will be huge upheaval. Take the industrial revolution. if you worked in a textile factory somewhere in the US, that job disappeared pretty quickly. It also led to turmoil in the economy. But overall, the economy flourished in the medium to long term.
I don’t know. But it’s a fascinating subject.
Banker: The best that could happen is if the transition was gradual. There was a time when 90% of the jobs in the United States were in agriculture. Now it’s less than 5%. But this transition took over 100 years.
Steinhaeuser: I agree. I think what’s fundamentally different is that the pace is accelerating.
Take SAP. For 50 years, we’ve been driving automation in finance. That was the original area in which we started. 50 years ago. Before SAP, people did finance and accounting with pencil and paper or punch cards.
Now, with artificial intelligence, where are we going in the next five years? There will still be financial sections. It is not that finance as a job will be uprooted. Work will become less and less transactional and more and more strategic in solving problems, forecasting, analyzing problems and identifying opportunities for optimization. It’s hard to predict what will actually happen.
Go into the field of law or consulting. I use an AI tool to challenge me, guide me and bounce around ideas. So you could say, “AI can do fantastic legal analysis, I don’t need lawyers and consultants anymore.”
I used to be a consultant. When the Internet came along, a radical technology change, a mentor of mine said to me, “Sebastian, we don’t need partners in consulting firms anymore because their main job was to go to a library and do research.” We now had all of this on Wikipedia.
What happened? Consulting exploded.
The same could be true of law. Because of human ingenuity, there will be new problems to solve, new laws to be written.
There must be guardrails. There are clearly risks for some sectors. Safety is risk. But AI can create significant value and prosperity.
Banker: My own work has been influenced by artificial intelligence. I work for Forbes.com. 50% of our page views are gone because readers can do a Google search and the AI says, “This is what you need to know about this topic, these are the main points.”
But that actually made my job more interesting. I can’t write general articles. I must write in depth. I have to write things that you can’t find on the internet.
Steinhaeuser: What I found for myself, consumption of high-quality journalism went up, not down. I see a dichotomy between what a LLM prompt creation and high quality content. You can still tell.
Well, that’s what I mean. You can’t say that the journalist’s job is gone. all the managers jobs are now gone. Maybe we’re just massively raising the bar for what we can do as humans.
