SAP said on 4 May 2026 that it had signed a definitive agreement to buy Prior Labs, a Freiburg-based company that builds foundation models for tables of numbers rather than text. SAP also committed to invest more than €1 billion (about $1.2 billion) over four years to turn Prior Labs into what it called a leading frontier AI lab for structured business data.
SAP did not disclose the purchase price when it announced the deal. Its half-year report, filed with the US Securities and Exchange Commission, later said the deal closed on 16 July 2026 and that the cash paid was about €0.4 billion (about $470 million), the majority of the total consideration. The €1 billion commitment is separate spending on the lab.
Prior Labs will keep its own brand, leadership and research agenda and will run as an independent unit inside SAP. It will continue to publish research and release its models openly, and SAP said it supports that open-source approach.
What Prior Labs built
Prior Labs makes tabular foundation models. Large language models handle text well but struggle with spreadsheets and databases, where businesses keep data on payments, suppliers and customers. Prior Labs' TabPFN models are trained in advance, on 130 million synthetic datasets according to Silicon Canals, and can then make predictions on a new table without being trained for that specific task.
The TabPFN research was published in the journal Nature. SAP said the open-source models had been downloaded more than 3 million times and that TabPFN-2.6 was the top model on TabArena, a benchmark for tabular models, matching the accuracy of a four-hour automated machine learning pipeline. Tech.eu reported that the company's latest model is TabPFN-3-Thinking and that Hitachi uses its technology to help prevent train failures and TD for financial forecasting.
The company is based in Freiburg, with offices in Berlin and New York. SAP said its researchers came from companies including Google, Apple, Amazon, Microsoft, G-Research, Jane Street, Goldman Sachs and CERN. Neither company disclosed a headcount.
“Joining the SAP family gives us the resources, data environment and customer reach to take this category to its full potential.”
Why SAP is buying
SAP already built its own tabular model, SAP-RPT-1, and sees structured data as the area where it can lead in enterprise AI. Chief technology officer Philipp Herzig said SAP had recognised early that the biggest untapped opportunity was AI built for structured business data rather than large language models, and that combining Prior Labs' models with SAP's data and customer base was how it intended to lead the category.
SAP plans to bring the models into its products through SAP AI Core, SAP Business Data Cloud and its Joule agents. Holger Mueller of Constellation Research said tabular data matters for vendors whose software runs transactions, which made the purchase logical, though he also said SAP risked looking as if it were catching up in AI.
The founders and the funding
Prior Labs was founded in late 2024 by Frank Hutter, its chief executive, together with Noah Hollmann and Sauraj Gambhir. Yann LeCun and Bernhard Schoelkopf, president of the ELLIS research network and director of the Max Planck Institute for Intelligent Systems, will sit on its scientific advisory board.
In February 2025 the company raised a €9 million (about $9.4 million) pre-seed round led by Balderton Capital, with XTX Ventures, Hector Foundation, Atlantic Labs and Galion.exe. Angel investors included Hugging Face co-founder Thomas Wolf, Silo AI founder Peter Sarlin, Snyk founder Guy Podjarny and Black Forest Labs chief executive Robin Rombach. No later funding round was reported before the SAP deal.
Hutter said the company had built a strong team over 18 months and that SAP would give it the resources, data and customer reach to develop the category fully.
Two deals in one day
SAP announced the purchase on the same day as its agreement to buy Dremio, a US data lakehouse company, as part of a push to prepare company data for AI agents. SAP said the two deals, both closed in July, would reduce its 2026 operating profit by more than €100 million (about $117 million).
Tech.eu described Prior Labs as a German-founded frontier AI company sold just 18 months after its launch.
