SAP Acquires Prior Labs with Over €1 Billion Investment to Advance Enterprise AI

SAP has announced the acquisition of Berlin-based AI startup Prior Labs, just 18 months after the company was founded. The acquisition is backed by an investment of more than €1 billion, which will support AI infrastructure, talent acquisition, and long-term frontier research in enterprise artificial intelligence.

Despite becoming part of SAP, Prior Labs will continue operating under its own brand, leadership team, research agenda, and customer relationships. The company will also continue publishing its research and making its AI models openly available with SAP's support. The announcement follows Prior Labs' successful €9 million pre-seed funding round completed in 2025.

Founded in 2024 by Frank Hutter, Noah Hollmann, and Sauraj Gambhir, Prior Labs specializes in developing Tabular Foundation Models (TFMs), a new generation of AI models designed specifically for structured enterprise data. Instead of requiring organizations to train a separate AI model for every dataset, the company's flagship technology, TabPFN, uses a single pre-trained foundation model capable of solving prediction tasks such as payment delays, customer churn, supplier risk assessment, and demand forecasting directly from structured business data.

Prior Labs' technology has already been adopted across multiple industries. Its AI models help prevent railway failures for Hitachi, improve financial forecasting for TD Bank, and have been applied in hundreds of research projects covering areas such as pancreatic cancer diagnosis, wildfire prediction, and next-generation battery materials.

According to Prior Labs co-founder and CEO Frank Hutter, the company has evolved from a research project into a leading AI laboratory in just a year and a half. With SAP's backing, the team will gain access to enterprise-scale data environments, advanced computing infrastructure, and long-term funding required to develop the next generation of foundation models for business applications.

SAP believes the greatest opportunity in enterprise AI lies not only in large language models, but also in AI systems capable of understanding and processing the structured data that powers business operations. According to SAP CTO Philipp Herzig, Prior Labs has established itself as a global leader in the emerging category of Tabular Foundation Models, consistently achieving top results in public AI benchmarks.

The acquisition is part of SAP's broader strategy to strengthen its Business Data Cloud and Business AI portfolio while expanding Europe's enterprise AI ecosystem. Together with other major AI investments announced across Europe during 2026—including funding rounds for Nscale, Verda, Conduct, OpsMill, and Modern Relay—the total investment in the region's AI infrastructure now exceeds €2.9 billion.

With SAP's support, Prior Labs plans to expand its research into enterprise AI, scientific discovery, causal reasoning, relational data, and agentic AI systems. The company also intends to pursue ambitious long-term research initiatives in areas such as medical data analysis and materials science, helping shape the next generation of AI technologies for enterprise environments.