SAP acquires Prior Labs to establish frontier AI lab in Europe

By Aarav Garg

SAP SE has entered into a definitive agreement to acquire Prior Labs, a developer of tabular foundation models (TFMs), as the enterprise software company expands its artificial intelligence capabilities for structured business data.

Under the agreement, Prior Labs will continue operating as an independent entity, with SAP committing more than €1 billion over the next four years to scale the business into a global AI research lab focused on enterprise data.

“Early on, SAP recognised that the greatest untapped opportunity in enterprise AI wasn’t large language models; it was AI built for the structured data that runs the world’s businesses,” SAP CTO Philipp Herzig said. “We built SAP-RPT-1 to prove that conviction for enterprise data. Prior Labs has built a leading TFM on public benchmarks and built one of the leading research teams in this category. Combining their frontier model work with enterprise data and customer reach is how we intend to lead this category globally.”

The acquisition builds on SAP’s recent work in tabular foundation models, including its SAP-RPT-1 initiative. Unlike large language models, which are primarily designed for unstructured text, TFMs are built specifically to analyse structured business data such as financial records, supplier information and operational metrics.

“Over the last 18 months, Prior Labs has built an incredible team, increasing the velocity in tabular foundation models,” Prior Labs CEO Frank Hutter said. “Joining the SAP family gives us the resources, data environment and customer reach to take this category to its full potential.”

SAP said the technology could improve predictive capabilities across areas including payment delays, supplier risk assessment, customer churn analysis and sales forecasting. The company plans to integrate Prior Labs’ models into its enterprise AI infrastructure, including SAP AI Core, SAP Business Data Cloud and its Joule AI platform.

SAP said the independent lab structure is intended to preserve research agility while providing a pathway to commercial deployment across its enterprise software portfolio. The transaction is expected to close in the second or third quarter of 2026.