SAP Acquires AI Startup Prior Labs in €1 Billion Deal to Boost Business Intelligence
SAP has announced plans to acquire Freiburg-based AI startup Prior Labs in a deal worth over €1 billion. The move strengthens the company’s focus on business artificial intelligence, particularly in extracting insights from corporate data. Regulatory approval remains pending, with completion expected in 2026. The acquisition centres on Tabular Foundation Models (TFMs), a new category of AI designed to analyse structured enterprise data. SAP sees this technology as a way to unlock deeper business intelligence for its customers.
Prior Labs, founded by Frank Hutter, Noah Hollmann, and Sauraj Gambhir, will lead the development of these models. The startup has already gained recognition, with backing from AI experts like Yann LeCun. Under the agreement, Prior Labs will continue operating independently. SAP’s investment of over €1 billion over four years will fund research and expansion. The deal reflects a broader push by SAP to dominate the enterprise AI market.
The transaction is set to close in 2026, pending regulatory clearance. Once finalised, the partnership will accelerate TFM development, helping businesses extract more value from their data. SAP’s long-term investment signals confidence in Prior Labs’ technology and team.
