SAP has agreed to acquire German AI startup Prior Labs and plans to invest €1 billion over the next four years to expand the business into an AI research lab focused on structured enterprise data.
Acquisition Targets Structured Data AI Models
SAP said the acquisition remains subject to regulatory approval. The company did not disclose the purchase price, though sources cited by Pathfounders said the deal involved well over $500 million in upfront cash for Prior Labs’ founders.
The startup, founded 18 months ago by Frank Hutter, Noah Hollmann, and Sauraj Gambhir, develops tabular foundation models designed to analyze and generate predictions from structured datasets stored in enterprise databases.
SAP Expands AI Push Around Enterprise Data
SAP said the investment will support development of AI systems capable of combining structured enterprise data with language processing, reasoning, and domain-specific knowledge.
The company plans to integrate Prior Labs’ technology across products including SAP AI Core, SAP Business Data Cloud, and its agent framework Joule.
SAP CTO Philipp Herzig said the company identified structured enterprise data as a major opportunity for AI applications beyond large language models.
Prior Labs Maintains Open Source Models
SAP said Prior Labs will continue operating as an independent unit and will maintain its open source models. The startup said its TabPFN model series has been downloaded more than three million times.
Prior Labs previously raised approximately $9.3 million in a pre-seed funding round led by Balderton Capital earlier this year.
Balderton partner James Wise described the acquisition as one of Germany’s largest venture-backed exits.
Enterprise AI Competition Shapes SAP Strategy
The acquisition comes as enterprise software companies face pressure to adapt to AI-driven automation and agent technologies. SAP has restricted access to external AI agents through its APIs, permitting only approved architectures.
The company’s API policy prohibits unauthorized AI agents from accessing SAP products. Approved systems include SAP’s own Joule Agents platform, which remains in beta.
In March, Nvidia announced that Joule supports its Agent Toolkit software, which underpins Nvidia’s NemoClaw enterprise agent platform.
Different Approaches Emerge Among Enterprise Vendors
SAP’s controlled ecosystem contrasts with strategies from competitors such as Salesforce, which allows enterprises to integrate a wider range of third-party AI agents through its Headless 360 architecture.
SAP has also invested in multiple generative AI companies, including Anthropic, Aleph Alpha, and Cohere.
Featured image credits: Wikimedia Commons
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