In a direct challenge to the dominance of large language models, SAP is betting €1 billion that the future of enterprise AI lies in structured data.
In a direct challenge to the dominance of large language models, SAP is betting €1 billion that the future of enterprise AI lies in structured data.

(P1) European software giant SAP is acquiring 18-month-old German AI startup Prior Labs for a reported sum exceeding half a billion dollars, signaling a major push into AI for structured data. The deal, part of a larger €1 billion investment over the next four years, aims to build a globally-leading AI lab focused on the tabular data that underpins enterprise resource planning, a direct counter-move against the ‘SaaSpocalypse’ that has pressured legacy software providers.
(P2) "Early on, SAP recognized 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 in a statement.
(P3) While the exact acquisition price was not disclosed, sources report an "almost all cash" deal with well over half a billion dollars upfront for the founders. Prior Labs, founded just 18 months ago, gained significant traction with its open-source TabPFN models for tabular foundation models (TFMs), which have been downloaded over three million times. The startup had previously raised just $9.3 million in a pre-seed round in February 2025.
(P4) The move is critical for SAP, whose stock has suffered in 2026 as investors question its defense against AI disruption. By acquiring Prior Labs, SAP is not just buying technology but a strategic shortcut to creating specialized AI that can directly integrate with its core database and business process software, potentially creating a powerful, defensible moat against both AI-native startups and other enterprise software incumbents like Salesforce.
SAP’s strategy appears to be the creation of a walled garden for its vast customer base. The company has blocked unauthorized AI agents like OpenClaw from its ecosystem, instead promoting its own Joule Agents and SAP-endorsed architectures. This includes a partnership with Nvidia to support NemoClaw, an enterprise-focused agent toolkit, a stark contrast to competitor Salesforce, which is allowing customers to bring their own agents, including OpenClaw, into its new Headless 360 architecture.
The acquisition will establish Prior Labs as an independent unit within SAP, tasked with building out TFMs that can reason over the tables and databases at the heart of enterprise operations. The founders, Frank Hutter, Noah Hollmann, and Sauraj Gambhir, celebrated the deal as a "massive boost" to create a "globally-leading frontier AI lab for structured data — in Europe, in the open," promising to maintain the popular open-source versions of their models.
This investment follows SAP’s earlier, smaller investments in large language model developers like Anthropic, Cohere, and Aleph Alpha. However, the nine-figure acquisition of a specialist in structured data AI shows a clear strategic pivot. It’s a bet that for its enterprise clients in accounting, HR, and procurement, AI that deeply understands tables is more valuable than AI that understands poetry.
For investors, SAP's move is a decisive answer to the AI threat, turning it into a focused opportunity. While the company's stock has traded slightly upwards on the news, the €1 billion investment is a long-term play. The success of the new lab will determine if SAP can solidify its dominance in enterprise software by owning the AI layer for structured data, a market potentially more lucrative and defensible than the crowded field of general-purpose language models.
This article is for informational purposes only and does not constitute investment advice.