SAP has agreed to acquire startup Prior Labs as part of an ambitious plan to turn it into what SAP called a “globally leading” frontier lab.
No financial details of the deal were revealed, but SAP confirmed it intends to invest more than about $1.18 billion over the next four years in its effort to transform the Freiburg-based startup.
The size of the investment is noteworthy given that Prior Labs’ only previous funding was around in February 2025.
The transaction is subject to regulatory approval, with the deal expected to close in either the second or third quarter of this year.
At the heart of Prior Labs’ appeal is its pioneering development of tabular foundation models (TFMs), AI tools that are significantly more capable than large language models of understanding the tables, numbers and statistics that are key to how modern businesses operate.
This capability enables TFMs to make accurate predictions for enterprises — such as payment delays, supplier risks and opportunities to upsell — based on tabular data.
The founders of Prior Labs said in a May 4 blog post that their development of TFMs was born of “a conviction that ran against the grain of where most of the AI world was looking.”
“While the field poured its energy into language, we believed an untapped opportunity in AI sat somewhere else entirely: in the tables, spreadsheets, and structured records that actually run the world’s businesses and scientific discoveries,” they said.
SAP itself has already enjoyed success with its own SAP-RPT-1 TFM, while Prior Labs’ open source TabPFN has been downloaded more than three million times, with TabPFN-2.6 currently ranked first on TabArena, a benchmark for tabular foundation models.
Once the deal is closed, Prior Labs will continue to operate as a separate entity, while benefiting from SAP’s scale and resources, including SAP AI Core and SAP Business Data Cloud.
According to SAP, Prior Labs’ work will enable SAP to deliver TFMs with top predictive capability, in turn enabling it to power ever more sophisticated agentic AI systems.
SAP CTO Philipp Herzig hailed Prior Labs in a statement as “one of the leading research teams in this category.”