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By OpenAI COO’s own admission last February, “we have not yet really seen AI penetrate enterprise business processes.” For SAP, the issue remains central as the enterprise software giant faces pressure on its stock in 2026, in part tied to the “SaaSpocalypse.”
On Monday, SAP said it intends to acquire German AI startup Prior Labs for an undisclosed amount. The company also plans to invest €1 billion (about $1.16 billion) into the business over the next four years, subject to regulatory approval, to build an AI lab focused on structured data—tables and databases where enterprise information is typically stored.
SAP did not disclose how much it will pay for the acquisition. However, sources told Pathfounders that the deal was structured as an “almost all cash” transaction, with well over half a billion dollars in cash paid upfront to the startup’s founders: Frank Hutter, Noah Hollmann, and Sauraj Gambhir.
Prior Labs was founded 18 months ago and focuses on tabular foundation models (TFMs), which make predictions from data in tables and databases. The approach is positioned as a better fit for enterprises than language models, and specifically for SAP, whose widely used software supports functions such as accounting, HR, procurement, and expense management—areas that rely heavily on underlying databases.
While SAP moves to build its own AI lab, it is also taking a restrictive stance as the industry shifts toward agentic AI. The Information reported that SAP has blocked OpenClaw and other agent technologies that have not been explicitly authorized.
In response to a request for comment, SAP’s press department pointed to the company’s latest API policy. The policy states that SAP “prohibits” AI agents from accessing its products through its API unless they use “SAP-endorsed architectures.”
Authorized architectures include SAP’s own offering, Joule Agents, which is still in beta. Nvidia also announced in March that SAP’s Joule supports Nvidia’s Agent Toolkit. Nvidia’s toolkit is described as the basis for OpenClaw competitor NemoClaw, meaning SAP customers can use NemoClaw agents.
SAP’s CFO Dominik Asam previously said that the key is speed in embedding these technologies into SAP’s R&D portfolio to preserve its “relative economies of scale advantage.”
In addition to the Prior Labs move, SAP has backed generative AI efforts. In 2023, it invested in OpenAI rival Anthropic, as well as Aleph Alpha and Cohere, which have since announced plans to merge into “a global AI powerhouse.”
SAP has also developed SAP-RPT-1, a relational pretrained transformer model. SAP CTO Philipp Herzig said in a statement that SAP recognized early on 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.”
Prior Labs’ acquisition is intended to accelerate SAP’s structured-data strategy. The founders said in a blog post about the deal that its open-source model series, including TabPFN, has been downloaded more than three million times.
SAP said Prior Labs will maintain open-source versions. In a press release, SAP stated that the lab will operate as an independent unit to ensure “research velocity,” while SAP provides long-term investment and a direct path to productization across the SAP portfolio. SAP cited SAP AI Core and SAP Business Data Cloud, along with the agentic layer with Joule.
SAP and Prior Labs, headquartered in Freiburg, Germany, aim for TFMs that can access data in the tables where it resides, then combine that data with language, reasoning, and domain knowledge.
Founder and CEO Frank Hutter described the investment as a “massive boost,” saying it could help Prior Labs become a “globally-leading frontier AI lab for structured data — in Europe, in the open.”
In February 2025, Prior Labs raised about $9.3 million in a pre-seed round led by Balderton Capital. The amount was described as larger than competitor Neuralk-AI’s funding, but smaller than Fundamental, which emerged from stealth with a $255 million Series A in February.
In a post on X, Balderton partner James Wise called the acquisition “one of Germany’s biggest ever venture outcomes.”
As for SAP, the company’s stock was reported as trading slightly upwards at the time of writing.
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