SAP Swaps Pricey AI Models for Cheaper Ones While Quietly Extending Its Buyback
Published on 10/28/2026 at 22:01 | Editorial boerse-global.de
SAP is rethinking which artificial intelligence models it pays for, even as it expects the overall AI bill to keep climbing. The Walldorf-based software group is replacing especially costly models with alternatives that are good enough for the job, Reuters reported, a shift that matters to shareholders less as a cost-cutting exercise than as a test of how profitably SAP can serve surging AI demand.
The billing model is where the leverage sits
The economics hinge on how customers are charged. Clients pay SAP for tasks completed, not for the computing resources consumed. If the processing effort per task falls, lower operating costs can lift the margin — which makes cheaper models more than a technical tweak.
Over the next two years, SAP expects more than EUR 2 billion in AI-driven efficiency gains, according to Reuters. That is a forecast for the period, not a contribution already booked.
Chief Financial Officer Dominik Asam has said SAP has already swapped out expensive models in some products, including its internal consulting assistant. The precondition is that the cheaper alternatives deliver the required quality — price alone does not decide what gets deployed.
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Seventy-plus models, and a growing preference for the cheapest fit
SAP draws on more than 70 models from vendors including OpenAI, Anthropic and Google, and increasingly picks the least expensive one suited to a given task rather than defaulting to the most powerful — and priciest — option across the board.
That distinction between cost per task and total spend is central. Cheaper processing can support the margin while the AI bill still grows through heavier usage — precisely the scenario SAP anticipates. The stated goal is healthy margins, not an absolute decline in AI spending.
Client requirements narrow the field further. Authorities and companies in regulated industries pay closer attention to where a model comes from, Reuters noted, and European customers more often ask for local solutions. SAP therefore cannot simply choose on cost: a model has to satisfy both the technical brief and the customer's rules, so the cheapest option is only usable when it clears those hurdles.
Buyback rolls on alongside the AI overhaul
Separately, SAP disclosed fresh purchases under its ongoing share buyback, acquiring 42,848 of its own shares between 19 and 23 October via XETRA. By the end of that window the programme had repurchased 9,086,956 shares in total. The mandatory announcement published yesterday was the thirteenth interim report on the current programme — a status update on an existing capital measure, not the launch of a new one.
Investors should keep the two strands apart: the transactions concern SAP's own stock, while the cloud figures speak to operating momentum.
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The order book is the number that counts
On 21 October, SAP reported a current cloud backlog of EUR 24.1 billion for the third quarter of 2026, up 28%. Its subsequent guidance for a slight slowdown in the fourth quarter weighed on the shares, compounded by profit-taking after strong results and worries about the near-term monetisation of AI. For the full year 2026, SAP expects cloud revenue at the upper end of a range of EUR 25.8 billion to EUR 26.2 billion — a projection, not a reported annual figure.
Product news from SAP TechEd, presented yesterday, adds context to that operating picture: orchestration for multiple AI agents, governance features and expanded data integration among the highlights. Such announcements do not equate to additional revenue already booked.
The next fixed date for a financial verdict is 28 January 2027, when SAP plans to publish preliminary results for the fourth quarter and the 2026 financial year. Until then, two signals sit side by side: a buyback that keeps running, and an earnings release that will put the cloud outlook to the test. The repurchase notice confirms the capital measure is proceeding; the business numbers will settle how fast the order book is still growing.
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