SAP to acquire Prior Labs in push to scale tabular AI capabilities

SAP has agreed to acquire artificial intelligence startup Prior Labs, in a move aimed at strengthening its capabilities in models designed for structured business data.

Summary

• SAP agrees to acquire Prior Labs, committing over $1.1 billion to scale tabular AI research, with the deal expected to close by mid-2026 pending approval.
• Prior Labs will operate independently, with its tabular foundation models set to be integrated across SAP’s AI Core, Business Data Cloud, and Joule platforms.
• The move follows SAP’s acquisition of Dremio and expands its push into domain-specific AI focused on structured enterprise data use cases.

The German software company said it plans to invest more than €1 billion ($1.1 billion) over the next four years to expand Prior Labs into a global research lab focused on tabular foundation models.

Financial terms of the deal were not disclosed, and the transaction remains subject to regulatory approval, with closing expected in the second or third quarter of 2026.

Prior Labs will continue to operate as an independent unit after the deal is completed. SAP said this structure is intended to maintain research speed while linking new developments directly to its enterprise software products.

Unlike large language models, which are primarily trained on text, tabular foundation models are designed to analyze structured datasets such as financial records, customer behavior, and supply chain metrics. These models are typically used to predict outcomes like payment delays, churn risk, and supplier performance.

SAP Chief Technology Officer Philipp Herzig said the company has been investing in this area through its SAP-RPT-1 model, arguing that structured data remains a largely underused resource in enterprise AI. Prior Labs, founded by researchers including Frank Hutter, Noah Hollmann, and Sauraj Gambhir, has focused on building models tailored for such data.

The company’s open-source tool, TabPFN, has seen more than 3 million downloads, while its latest model, TabPFN-2.6, ranks among the top performers on industry benchmarks for tabular AI.

SAP said it plans to integrate the technology across its AI Core platform, Business Data Cloud, and its Joule assistant layer, with a focus on enabling business users to run predictive analysis without requiring advanced machine learning expertise.

SAP’s move to acquire Prior Labs comes shortly after the company agreed to purchase data platform firm Dremio, as part of efforts to unify enterprise data and accelerate agentic AI capabilities across its Business Data Cloud.

The deal also builds on SAP’s broader push into domain-specific AI, following the rollout of its SAP-RPT-1 model designed for structured business data, which aims to improve prediction accuracy in enterprise use cases such as finance and supply chains.