SAP Agrees to Acquire Prior Labs in €1 Billion Bet on Structured Data AI

SAP has agreed to acquire Prior Labs, the Freiburg-based startup that pioneered a category of artificial intelligence designed specifically for structured business data, in a deal that will see the German enterprise software giant commit more than €1 billion over four years to build what it describes as a globally leading frontier AI research lab in Europe. Financial terms of the acquisition were not disclosed. The transaction requires regulatory approval and is expected to close in the second or third quarter of 2026.

The announcement, made on 4 May 2026, arrived alongside a second acquisition: SAP confirmed it is simultaneously purchasing Dremio, a US-based open data lakehouse platform, in a parallel push to unify enterprise data infrastructure and accelerate its agentic AI capabilities. Both deals are pending regulatory clearance.

Prior Labs will continue to operate as an independent entity after the transaction closes — a structure SAP said is deliberate. The independence is designed to protect the research velocity that has defined the startup since its founding in 2024.

"Early on, SAP recognised that the greatest untapped opportunity in enterprise AI wasn't large language models; it was AI built for the structured data that runs the world's businesses," said Philipp Herzig, SAP's chief technology officer. "We built SAP-RPT-1 to prove that conviction for enterprise data. Prior Labs has built a leading TFM on public benchmarks and built one of the leading research teams in this category. Combining their frontier model work with enterprise data and customer reach is how we intend to lead this category globally."

The bet is built on a fundamental critique of where AI development has concentrated its energy. Large language models, SAP and Prior Labs argue, have only a rudimentary understanding of tables, numbers and statistics — the raw material of enterprise operations. Tabular Foundation Models are purpose-built for exactly that gap, learning statistical reasoning directly from data rather than from language, and enabling accurate predictions on business outcomes such as payment delinquencies, supplier risks, customer churn and upsell opportunities.

Prior Labs was founded by Frank Hutter, Noah Hollmann and Sauraj Gambhir, who will remain in place to lead the business. Hutter, who serves as CEO, framed the deal as a scaling decision. "Over the last 18 months, Prior Labs has built an incredible team, increasing the velocity in tabular foundation models," he said. "Joining the SAP family gives us the resources, data environment and customer reach to take this category to its full potential."

The startup's flagship model, TabPFN-2.6, currently ranks first on TabArena, the leading industry benchmark for tabular AI, and matches the accuracy of a four-hour automated machine learning pipeline in a single inference, without requiring model retraining. Its open-source counterpart, TabPFN, has accumulated more than three million downloads. SAP said it will maintain the open-source strategy following the close.

Prior Labs' scientific credentials are considerable. Its TabPFN model series was first published in Nature and has since been validated across hundreds of independent academic studies. Its scientific advisory board includes Yann LeCun, the Turing Award-winning researcher and executive chairman at Advanced Machine Intelligence, and Bernhard Schölkopf, director of the Max Planck Institute for Intelligent Systems and president of ELLIS, the European network of AI research institutes. Both will remain on the board as the lab scales. The company also draws on researchers recruited from Google, Apple, Amazon, Microsoft, Jane Street, Goldman Sachs and CERN, with offices in Freiburg, Berlin and New York.

The acquisition is notably fast by European technology standards. Prior Labs raised its first and only funding round — a €9 million seed — in February 2025, less than 15 months before agreeing to be sold. The deal delivers an exit for a cohort of European investors including Balderton Capital, Atlantic Labs and XTX Ventures, alongside angel backers that included Robin Rombach, co-founder of Black Forest Labs, and Thomas Wolf, co-founder of Hugging Face.

After the close, SAP plans to integrate Prior Labs' technology across SAP AI Core, SAP Business Data Cloud and Joule, its agentic AI layer. The stated aim is to enable business users to run predictive analysis and what-if scenarios in natural language, without requiring machine learning expertise. SAP described the roadmap as moving beyond prediction toward causation: knowing not only what will happen in a business scenario, but why.

The Dremio acquisition adds a parallel dimension to the strategy. Where Prior Labs addresses the model side of enterprise AI, Dremio tackles data fragmentation — the reason many enterprise AI projects fail before they reach a model at all. The two deals together represent SAP's most concentrated AI infrastructure investment in a single day, and reflect a broader acknowledgement within the company that it has ground to make up against AI-native competitors, including OpenAI and Anthropic, which have applied growing pressure to traditional enterprise software vendors across recent quarters.