The largest and best-known U.S. tech stocks are sometimes labelled ‘The Magnificent Seven’, after the Hollywood action franchise featuring multiple lead roles. An equivalent movie-based metaphor for big tech in Europe would have a cast of one—think The Bourne Identity’s Jason Bourne or Alien’s Ellen Ripley.
Because while investors in America (and increasingly China too) have many large and fast growing tech companies from which to choose, in Europe there is really only one firm that in scale and reach can stand comparison with the likes of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. That is Germany’s SAP, or as it is sometimes known, Der Eine (The One).
Not only is the firm—a specialist in back-office enterprise resource planning (ERP) software—Europe’s biggest tech company, it is also the continent’s most valuable company full stop, with a market capitalization approaching €300 billion, having overtaken previous incumbent, Danish pharma darling Novo Nordisk, in March this year.
It stands in 450th place on the Fortune Global 500 list, employs 109,000 people in over 130 different countries and boasts a stellar customer list that includes 98 of the world’s 100 largest companies.
One of the secrets to SAP’s success is understanding that in technology, there is never a good time to rest on your laurels, says chief operating officer Sebastian Steinhauser. “We remind ourselves every day that tech is the most competitive industry on earth. With every new wave of innovation the tech space is redefined, new companies pop up and you have to prove yourself again. I am very happy with that.”
SAP’s latest wave of change is moving both its own processes and those of its customers away from traditional (and expensive), bespoke on-site databases and into the cloud. The pivot began in 2020, and—despite some criticism that it was late to the party, which came with an initial 30% slump in the share price—it has proved to be a pretty smart move. Cloud migration is a proverbial win-win that cuts upfront costs and accelerates implementation for users, whilst also generating stable and predictable new revenues for SAP itself.
It’s also proof that despite received wisdom to the contrary, you don’t always have to be an early adopter to win in tech.
“You have to remember that the ERP system is the most critical software asset for any customer. There is a lot of trust involved in running that system,” says Steinhauser. “If the CRM [customer relationship management software] doesn’t work for an hour or so, it’s inconvenient. But if the ERP stops working then your entire business stands still.”
A strategy for AI
A consequence of this is that SAP customers generally prefer a proven solution that is a follower over one that is cutting-edge but untried.
SAP estimates that completing the cloud transformation will underwrite ongoing revenue growth until 2030, providing a welcome runway to prepare for the next wave of change—AI. “Our flagship offer for cloud migration is called Rise with SAP. It’s really a transformation that starts with moving your ERP to the cloud. The whole journey that follows is also about simplifying business processes, building AI use cases and expanding across our integrated suite to avoid cost and build business capability,” says Steinhauser.
“We remind ourselves every day that tech is the most competitive industry on earth…”Sebastian Steinhauser, chief operating officer at SAP
In terms of AI, he sees the greatest opportunities, both for SAP and for Europe as a whole, in application rather than development. “There has been a wave of AI experimentation, but now the real challenge is in AI adoption and value creation,” he says. So as AI technology matures, competitive advantage will be less about who has the best tech and more about who gets the most out of their data. “The real differentiation will be in the context rich data you can feed in.”
SAP already has a ton of great data—integrating it all so that AI agents can get to work extracting value for its clients is what deals like the much-vaunted tie-up with data intelligence platform Databricks is all about. “It’s the perfect example of our strategy. We partner with the best technology out there and then apply it to solve the most pressing business problems,” Steinhauser says.
The SAP story may lack the Silicon Valley glitz of go-to corporate tech reinventions like Apple and Microsoft, but it is no less radical, says Gary Dushnisky, professor of strategy and entrepreneurship at London Business School. “SAP has exercised amazing foresight in some of the strategies they have developed, and they have also managed to reinvent themselves two or three times. That’s something that many other companies have failed to do.”
Besides, SAP’s real commercial rivals are not so much the megacorps of the Magnificent Seven (many of whom are SAP users themselves) but rather enterprise service platform providers like Oracle, ServiceNow and Monday.com for back office and workflow automation, and also Salesforce, which specializes in CRM but is increasingly meeting SAP in a battle to own the complete ‘customer experience’.
Out-competing them requires a certain counter-intuitive lack of interest, says Steinhauser. “Ultimately I am not that interested in what this competitor or that competitor is doing, because that is not what makes SAP unique. I am much more interested in how customer expectations evolve with technology.”
Europe’s missing tech giants
Why aren’t more of SAP’s rival companies European? The stock answer is that European companies simply aren’t as ambitious, but that is too simplistic for Dushnitsky. He highlights structural differences such as the huge disparity in the financial firepower available in the U.S. and increasingly Asia, compared to Europe.
“There has been a wave of AI experimentation, but now the real challenge is in AI adoption and value creation.”Sebastian Steinhauser
This makes it much more likely that promising European companies will be acquired by U.S. ones before they can go global than the other way round. Another related difference is in American founders’ inclination to rebuff would-be acquirers rather than give in to them: having the nerve to say ‘no’ when a tempting offer is on the table.
“Mark Zuckerberg said no, Sergey Brin said no. Across the globe, people who are able to build these large organizations are people who want to build, rather than wanting to sell out,” Dushnitsky observes.
Rather than blaming the companies, Steinhauser says that it is the environment they operate in that needs attention. “I’m a passionate European, and Europe has all the ingredients. Some of the best talent, the best universities and the best research in the world are in Europe”.
But the continent loses out in other ways. For example, as the Draghi report on European competitiveness detailed, tech companies looking to expand across Europe must negotiate no fewer than 100 regulations relating to software, and 270 regulatory bodies. “We’d love to see five more SAP’s, but unfortunately I think [in Europe] we are still more focused on creating barriers to innovation,” Steinhauser says.
Ultimately, focusing too much on questions of origin and location can hinder rather than facilitate growth ambitions, Steinhauser concludes. “I think part of SAP having achieved the scale we have is that we never defined ourselves as German or European, but as a global tech company having to compete with other global technology companies, 99% of which sit in the U.S.”
Europe lags the U.S. and China in key growth sectors due to costly energy and stalled market reforms. This article series explores how technology, regulation, and innovation can revive its competitiveness.
Defense Secretary Pete Hegseth defended strikes on alleged drug cartel boats during remarks Saturday at the Ronald Reagan Presidential Library, saying President Donald Trump has the power to take military action “as he sees fit” to defend the nation.
Hegseth dismissed criticism of the strikes, which have killed more than 80 people and now face intense scrutiny over concerns that they violated international law. Saying the strikes are justified to protect Americans, Hegseth likened the fight to the war on terror following the Sept. 11, 2001 attacks.
“If you’re working for a designated terrorist organization and you bring drugs to this country in a boat, we will find you and we will sink you. Let there be no doubt about it,” Hegseth said during his keynote address at the Reagan National Defense Forum. “President Trump can and will take decisive military action as he sees fit to defend our nation’s interests. Let no country on earth doubt that for a moment.”
The most recent strike brings the death toll of the campaign to at least 87 people. Lawmakers have sought more answers about the attacks and their legal justification, and whether U.S. forces were ordered to launch a follow-up strike following a September attack even after the Pentagon knew of survivors.
Hegseth’s remarks came after the Trump administration released its new national security strategy, one that paints European allies as weak and aims to reassert America’s dominance in the Western Hemisphere.
During the speech, Hegseth also discussed the need to check China’s rise through strength instead of conflict. He repeated Trump’s vow to resume nuclear testing on an equal basis as China and Russia — a goal that has alarmed many nuclear arms experts. China and Russia haven’t conducted explosive tests in decades, though the Kremlin said it would follow the U.S. if Trump restarted tests.
The speech was delivered at the Reagan National Defense Forum at the Ronald Reagan Presidential Foundation and Institute in California, an event which brings together top national security experts from around the country. Hegseth used the visit to argue that Trump is Reagan’s “true and rightful heir” when it comes to muscular foreign policy.
By contrast, Hegseth criticized Republican leaders in the years since Reagan for supporting wars in the Middle East and democracy-building efforts that didn’t work. He also blasted those who have argued that climate change poses serious challenges to military readiness.
“The war department will not be distracted by democracy building, interventionism, undefined wars, regime change, climate change, woke moralizing and feckless nation building,” he said.
One way or another, U.S. debt will stop expanding unsustainably, but the most likely outcome is also among the most painful, according to Jeffrey Frankel, a Harvard professor and former member of President Bill Clinton’s Council of Economic Advisers.
Publicly held debt is already at 99% of GDP and is on track to hit 107% by 2029, breaking the record set after the end of World War II. Debt service alone is more than $11 billion a week, or 15% of federal spending in the current fiscal year.
In a Project Syndicate op-ed last week, Frankel went down the list of possible debt solutions: faster economic growth, lower interest rates, default, inflation, financial repression, and fiscal austerity.
While faster growth is the most appealing option, it’s not coming to the rescue due to the shrinking labor force, he said. AI will boost productivity, but not as much as would be needed to rein in U.S. debt.
Frankel also said the previous era of low rates was a historic anomaly that’s not coming back, and default isn’t plausible given already-growing doubts about Treasury bonds as a safe asset, especially after President Donald Trump’s “Liberation Day” tariff shocker.
Relying on inflation to shrink the real value of U.S. debt would be just as bad as a default, and financial repression would require the federal government to essentially force banks to buy bonds with artificially low yields, he explained.
“There is one possibility left: severe fiscal austerity,” Frankel added.
How severe? A sustainable U.S. debt trajectory would entail elimination of nearly all defense spending or almost all non-defense discretionary outlays, he estimated.
For the foreseeable future, Democrats are unlikely to slash top programs, while Republicans are likely to use any fiscal breathing room to push for more tax cuts, Frankel said.
“Eventually, in the unforeseeable future, austerity may be the most likely of the six possible outcomes,” he warned. “Unfortunately, it will probably come only after a severe fiscal crisis. The longer it takes for that reckoning to arrive, the more radical the adjustment will need to be.”
The austerity forecast echoes an earlier note from Oxford Economics, which said the expected insolvency of the Social Security and Medicare trust funds by 2034 will serve as a catalyst for fiscal reform.
In Oxford’s view, lawmakers will seek to prevent a fiscal crisis in the form of a precipitous drop in demand for Treasury bonds, sending rates soaring.
But that’s only after lawmakers try to take the more politically expedient path by allowing Social Security and Medicare to tap general revenue that funds other parts of the federal government.
“However, unfavorable fiscal news of this sort could trigger a negative reaction in the US bond market, which would view this as a capitulation on one of the last major political openings for reforms,” Bernard Yaros, lead U.S. economist at Oxford Economics, wrote. “A sharp upward repricing of the term premium for longer-dated bonds could force Congress back into a reform mindset.”
Nearly $300 billion was inherited this year as the Great Wealth Transfer picks up speed, showering family members with immense windfalls.
According to the latest UBS Billionaire Ambitions Report, 91 heirs inherited a record-high $297.8 billion in 2025, up 36% from a year ago despite fewer inheritors.
“These heirs are proof of a multi-year wealth transfer that’s intensifying,” Benjamin Cavalli, head of Strategic Clients & Global Connectivity at UBS Global Wealth Management, said in the report.
Western Europe led the way with 48 individuals inheriting $149.5 billion. That includes 15 members of two “German pharmaceutical families,” with the youngest just 19 years old and the oldest at 94.
Meanwhile, 18 heirs in North America got $86.5 billion, and 11 in South East Asia received $24.7 billion, UBS said.
This year’s wealth transfer lifted the number of multi-generational billionaires to 860, who have total assets of $4.7 trillion, up from 805 with $4.2 trillion in 2024.
Wealth management firm Cerulli Associates estimated last year that $124 trillion worldwide will be handed over through 2048, dubbing it the Great Wealth Transfer. More than half of that amount will come from high-net-worth and ultra-high-net-worth people.
Among billionaires, UBS expects they will likely transfer about $6.9 trillion by 2040, with at least $5.9 trillion of that being passed to children, either directly or indirectly.
“I think the wealth transfer isn’t going to be just a big bang,” he said. “It’s not like, we just passed peak age 65 and now all the money is going to move.”
Of course, millennials and Gen Zers with rich relatives aren’t the only ones who sat to reap billions. More entrepreneurs also joined the ranks of the super rich.
In 2025, 196 self-made billionaires were newly minted with total wealth of $386.5 billion. That trails only the record year of 2021 and is up from last year, which saw 161 self-made individuals with assets of $305.6 billion.
But despite the hype over the AI boom and startups with astronomical valuations, some of the new U.S. billionaires come from a range of industries.
UBS highlighted Ben Lamm, cofounder of genetics and bioscience company Colossal; Michael Dorrell, cofounder and CEO of infrastructure investment firm Stonepeak; as well as Bob Pender and Mike Sabel, cofounders of LNG exporter Venture Global.
“A fresh generation of billionaires is steadily emerging,” UBS said. “In a highly uncertain time for geopolitics and economics, entrepreneurs are innovating at scale across a range of sectors and markets.”
Politics8 years ago