SAP Bets Big on European AI With Prior Labs Acquisition

WALLDORF, Germany: In a big business move, SAP agrees to acquire Prior Labs and commit over €1 billion to build a European frontier AI research lab.

The German software giant will invest the funds across the next four years. Prior Labs continues operating as an independent unit despite the acquisition. The Freiburg-based startup focuses on Tabular Foundation Models for structured business data.

Prior Labs raised just €9 million in pre-seed funding before this deal. Balderton Capital, Atlantic Labs, and XTX Ventures backed that initial round. The exit ranks among the fastest in European venture capital history overall.

Frank Hutter, Noah Hollmann, and Sauraj Gambhir founded Prior Labs in 2024. The team builds models specifically designed for tabular and structured data. Traditional language models struggle to handle spreadsheets that run global enterprise operations.

SAP plans to integrate Prior Labs technology across its full product portfolio. Models will flow through SAP AI Core, Business Data Cloud, and Joule. The integration targets enterprise customers seeking AI-powered predictions on operational data.

The deal exemplifies Europe’s strategy for sovereign AI capabilities. Prior Labs’ open-source TabPFN tool has surpassed three million downloads globally. Meta’s Yann LeCun serves on it’s scientific advisory board alongside other luminaries.

“The greatest untapped opportunity in enterprise AI was structured data,” says SAP CTO Philipp Herzig in a statement.

European policymakers spent years trying to engineer outcomes like this acquisition. The continent holds more AI researchers than the United States by absolute count. Converting that talent into commercial outcomes has remained a persistent challenge.

The transaction expects to close in Q2 or Q3 of 2026, pending regulatory approval. SAP also recently acquired data infrastructure company Dremio in a parallel move. Together, the deals consolidate significant structured-data AI capabilities under one European roof.

Amita Parul

Amita Parul is an Independent journalist with experience in reporting and commentary on current events and sociopolitical developments. She contributes original reporting and analysis that aligns with Tea4Tech’s editorial standards for accuracy, transparency, and context, focusing on business and technology trends. || Amita covers emerging news stories and provides explanatory insights that help readers understand both the events and their implications.