Home / Technology / SAP Acquires Prior Labs for AI Data Power
SAP Acquires Prior Labs for AI Data Power
6 May
Summary
- SAP acquired German AI startup Prior Labs for structured data focus.
- Company plans to invest €1 billion over four years in the startup.
- SAP is also restricting unauthorized AI agent access to its products.
SAP announced its intention to acquire German AI startup Prior Labs for an undisclosed amount, signaling a strategic pivot towards structured data AI. Pending regulatory approval, SAP plans a substantial investment of €1 billion (approximately $1.16 billion) over the next four years to develop Prior Labs into a dedicated AI lab focused on tabular data. This move addresses SAP's need to integrate AI into enterprise business processes, especially as the company faced stock declines in 2026.
Prior Labs, founded 18 months ago by Frank Hutter, Noah Hollmann, and Sauraj Gambhir, specializes in tabular foundation models (TFMs) designed for data found in enterprise tables and databases. This focus is seen as a more direct fit for SAP's accounting, HR, and procurement software than large language models. The acquisition comes as SAP appears to be playing defense in the rapidly advancing agentic AI landscape, notably blocking unauthorized AI agents like OpenClaw from accessing its products through its API, with exceptions only for SAP-endorsed architectures.
This strategic acquisition follows SAP's earlier investments in generative AI companies such as Anthropic, Aleph Alpha, and Cohere. The company also developed its own relational pretrained transformer model, SAP-RPT-1. Prior Labs' acquisition is viewed as a significant shortcut, especially given the strong developer traction for its open-source models, which have seen over three million downloads. SAP has pledged to maintain the open-source versions while integrating Prior Labs' technology into its product portfolio via SAP AI Core and SAP Business Data Cloud, as well as the Joule agent layer.
The joint effort aims to develop TFMs capable of extracting data from tables, combining it with language, reasoning, and domain knowledge. Founders expressed optimism that Prior Labs, with SAP's support, could become a leading frontier AI lab for structured data in Europe. This acquisition is considered one of Germany's largest venture outcomes, with Prior Labs having previously raised approximately $9.3 million in pre-seed funding in February 2025.
