SAP Sees Rising Demand for Sustainability Software Amid U.S. Climate Policy Shift

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SAP, the German enterprise software company, is witnessing growing global demand for software solutions that help companies manage and track their sustainability efforts, despite the U.S. government’s weakening commitment to climate protection. SAP’s Chief Financial Officer, Dominik Asam, shared in an interview with Reuters that the company is seeing heightened interest in sustainability software, particularly its Green Ledger tool, which is designed to provide verifiable sustainability reporting similar to a financial balance sheet. Asam emphasized that despite the U.S. decision to withdraw from the Paris climate agreement by 2026, the importance of sustainability will remain central to investor discussions.

Asam pointed out that many investors he spoke with at the World Economic Forum in Davos remain optimistic about sustainability, even in light of recent U.S. elections. He believes companies will continue to rely on accurate data and analytical tools to drive decisions related to sustainability. SAP’s Green Ledger software is poised to play a key role in this ongoing trend, particularly with upcoming regulations like the European Corporate Sustainability Reporting Directive (CSRD), which will require companies to provide such reporting by 2028.

While SAP’s Green Ledger software is primarily being used by chemical company Covestro, Asam anticipates a surge in adoption, with more contracts expected in the second half of the year. SAP sees a major growth opportunity in this space as businesses strive to comply with increasing sustainability reporting requirements worldwide.

 

US Investigates Whether DeepSeek Used Restricted AI Chips

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The U.S. Commerce Department is investigating whether DeepSeek, the Chinese AI company behind a disruptive new model, has been using U.S.-made AI chips that are restricted from being shipped to China, according to a source familiar with the situation. DeepSeek’s free assistant, which launched last week, has been widely praised for its cost-effective performance and ability to process less data compared to U.S. models. It quickly became the most downloaded app on Apple’s App Store, raising concerns in the U.S. about its competitive edge in AI and contributing to a significant drop in the stock market, which wiped out around $1 trillion from U.S. tech stocks.

The current restrictions on advanced AI processors, particularly from Nvidia (NVDA.O), are designed to prevent China from accessing the most sophisticated chips that could enhance its AI capabilities. The U.S. has been tracking organized smuggling operations of these chips into China from countries such as Malaysia, Singapore, and the United Arab Emirates.

DeepSeek has reportedly used Nvidia’s H800 chips, which were legally purchased in 2023. However, the legality of DeepSeek’s access to other U.S. chips remains unclear. It is also known to have Nvidia’s H20 chips, which can be legally sold to China. Although there have been discussions within the U.S. government about placing more restrictions on these chips, the Biden administration and new Trump officials are also weighing tighter controls.

In response to these allegations, Nvidia emphasized that it requires its partners to comply with U.S. export laws, noting that many of its clients in Singapore might use the country as an intermediary for products destined for the U.S. and the West. However, the Singapore trade ministry stated that while there was no indication that DeepSeek obtained export-controlled chips from Singapore, it would continue to uphold the rule of law and cooperate with U.S. authorities.

DeepSeek has also been linked to the use of chips that, while not banned, have raised concerns among AI industry experts. Dario Amodei, CEO of Anthropic, expressed doubts over the legality of some of DeepSeek’s chips, suggesting that they could include smuggled or pre-banned processors.

The U.S. has imposed a range of restrictions on AI chip exports to China and is planning to extend these limits to other countries.

 

Intel’s Quarterly Revenue Tops Expectations, Investors Await New CEO

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Intel (INTC.O) reported better-than-expected results for its December quarter on Thursday, surpassing analysts’ low estimates. However, the chipmaker’s forecast for the upcoming quarter fell short, as it faces weak demand for its data center chips. Investors are also awaiting clarity on Intel’s leadership following the ousting of former CEO Pat Gelsinger last month. Currently, two interim co-CEOs are at the helm of the company, which has struggled to compete with rivals like Nvidia (NVDA.O), particularly in the AI chip market.

The quarterly results were overshadowed by concerns about Intel’s long-term strategy and leadership transition. Despite this, the company’s shares rose by 3.8% in after-hours trading, a relief after a challenging year where Intel’s stock lost around 60% of its value.

Intel’s struggle to capitalize on the booming AI market was evident when Co-interim CEO Michelle Johnston Holthaus announced that the company would shelve its upcoming graphics processing unit (GPU) design, Falcon Shores. Instead, Intel plans to use the chip internally as a test product, with a focus on future data center AI chips.

For the first quarter, Intel projected revenue between $11.7 billion and $12.7 billion, below analysts’ average estimate of $12.87 billion. The company cited “normal seasonality” and potential tariffs under the Biden administration as factors contributing to its cautious outlook. According to CFO David Zinsner, the possibility of tariffs may have prompted some customers to buy Intel’s chips ahead of potential price increases.

Intel’s ongoing transition includes a focus on becoming a contract chip manufacturer for other companies, but this shift has raised concerns among investors about its cash flow. Last year, Intel abandoned its forecast of selling over $500 million worth of its new AI chips, Gaudi, which struggled to compete with Nvidia’s products.

For the upcoming quarter, Intel forecasted break-even adjusted per-share earnings, while analysts expected adjusted profits of 9 cents per share. The company has received federal grants under the CHIPS Act, which helped boost its revenue and profit margins for the fourth quarter.

In the personal computer market, which remains Intel’s largest revenue segment, global shipments grew only modestly last year, missing analysts’ expectations for a stronger rebound. Intel has also been losing market share in both the PC and server CPU sectors to competitor AMD (AMD.O), a trend expected to continue into 2025.