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SAP Announces Acquisition of Prior Labs with €1 Billion Investment Plan
SAP plans to acquire German AI startup Prior Labs for an undisclosed amount and invest €1 billion over four years to build an AI lab focused on structured data. The deal, pending regulatory approval, includes an upfront cash payment exceeding half a billion dollars to the founders. Prior Labs specializes in tabular foundation models used in enterprise databases.
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SAP announced on Monday its intention to acquire Prior Labs, a German AI startup focused on tabular foundation models, for an undisclosed amount. 16 billion, into Prior Labs over the next four years to develop it into an AI lab centered on structured data, such as tables and databases that underpin business operations. The acquisition remains pending regulatory approval.
Sources told Pathfounders that the deal is almost entirely in cash, with well over half a billion dollars paid upfront to Prior Labs' founders. Frank Hutter, Noah Hollmann, and Sauraj Gambhir co-founded the company 18 months ago in Freiburg, Germany. Prior Labs' TabPFN model series has been downloaded over three million times, according to a blog post by the founders.
SAP's software products for accounting, human resources, procurement, and expense management depend heavily on its database, making structured data AI a strategic fit. " Under the deal, Prior Labs will operate as an independent unit, and its open source models will be maintained, as outlined in SAP's press release.
3 million in a pre-seed funding round in February 2025, led by Balderton Capital—more than competitor Neuralk-AI's funding but far less than Fundamental's $255 million Series A that same month.
" @techcrunch reported that SAP's stock has dropped in 2026 amid challenges in the software-as-a-service sector. The company has previously invested in AI firms, backing Anthropic, Aleph Alpha, and Cohere in 2023; Aleph Alpha and Cohere now plan to merge into a global AI powerhouse. SAP has also developed its own technology, including the relational pretrained transformer model SAP-RPT-1.
