SAP has agreed to acquire Prior Labs, a two-year-old German artificial intelligence startup, in a deal that will see the enterprise software giant commit more than €1 billion over four years to build the company into a major AI research lab.
The transaction is expected to close in the second or third quarter of 2026. Financial terms of the acquisition have not been disclosed.
Founded in 2024 by Frank Hutter, Noah Hollmann and Sauraj Gambhir, Prior Labs has quickly built attention in a specialised corner of AI: tabular foundation models. These are AI models designed for structured business data such as tables, numbers and operational records.
That focus makes the acquisition particularly relevant for SAP, whose products are deeply embedded in enterprise workflows. Prior Labs’ technology can help businesses make predictions around late payments, supplier risk, customer churn and sales opportunities.
The startup is best known for TabPFN, its open-source AI tool that has crossed more than 3 million downloads. Its latest model, TabPFN-2.6, is ranked as the top model on TabArena, a benchmark for tabular foundation models.
The deal comes just 15 months after Prior Labs raised its only funding round, a €9 million pre-seed led by Balderton Capital. After the acquisition closes, Prior Labs will continue to operate as an independent company, giving it room to maintain research speed while drawing on SAP’s scale, data environment and customer reach.
“Joining the SAP family gives us the resources, data environment, and customer reach to take this category to its full potential,” Prior Labs CEO Frank Hutter said.
For SAP, the move signals a clear push beyond generic AI tools and into models built for the kind of structured data that companies use every day. Prior Labs’ direct competitive set includes AutoML pipelines and tools such as AutoGluon, H2O and tuned gradient-boosted tree frameworks like XGBoost.
The acquisition also underlines how quickly specialised AI research teams are becoming strategically valuable. Prior Labs had raised only €9 million before SAP’s billion-euro commitment, but its work sits close to a core enterprise problem: turning business data into reliable predictions.
If completed, the deal could give SAP a stronger position in enterprise AI, especially in use cases where accuracy, speed and structured data matter more than broad consumer-facing AI capabilities.
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