How a Tiny German AI Lab Scored a $1 Billion Exit to SAP in Just 18 Months

Jan de Vries · 2026-07-17

### A Billion-Dollar Bet on Tabular AI Berlin-based frontier AI lab Prior Labs just made headlines. The company announced that multinational software giant SAP has completed its acquisition. SAP is backing this move with more than $1 billion in investment. That money will fund infrastructure, hiring, and long-term frontier research. Prior Labs isn't disappearing into SAP. It'll keep its own brand, leadership, research agenda, and customer relationships. It will also continue to publish its research and make its models openly available. All of this follows a $9.4 million pre-Seed round back in 2025. ### How It All Happened Frank Hutter, co-founder and CEO of Prior Labs, put it simply: "Eighteen months ago, Prior Labs was a research project. Today we're beginning our next chapter as an AI lab with the resources to tackle problems we simply couldn't before." He went on to explain that taking tabular foundation models to the next level requires better data environments, deployment surfaces, and long-term research investment. SAP, he says, is uniquely positioned to provide all of these. ### Why SAP Made This Move Philipp Herzig, CTO of SAP, shared his perspective: "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." Herzig added that Prior Labs has defined the category of tabular foundation models (TFMs) and built the world's strongest research team in this space. "Combining their frontier model work with enterprise data and customer reach is how we intend to lead this category globally." ### What Are Tabular Foundation Models? Founded in 2024 by Frank Hutter, Noah Hollmann, and Sauraj Gambhir, Prior Labs pioneered TFMs. These are a category of AI purpose-built for enterprise data. Instead of training a separate AI model for every dataset, their TabPFN uses a single pre-trained foundation model. It can solve prediction tasks like payment delays, churn, supplier risk, and demand forecasting directly from structured data. ### Real-World Impact Already Prior Labs' technology is already making a difference: - Helping prevent train failures with Hitachi - Improving financial forecasting with TD - Applied in hundreds of published research projects, from pancreatic cancer diagnosis to wildfire prediction to next-generation battery materials ### The Bigger European Picture SAP's acquisition of Prior Labs follows substantial investment in European infrastructure needed to train, deploy, and govern enterprise AI. EU-Startups' 2026 coverage includes approximately $2 billion across comparable companies. That's led by Nscale's $1.8 billion AI-compute round and Verda's $105 million financing. Investments also flowed into enterprise data, memory, and ERP infrastructure at Conduct, OpsMill, and Modern Relay. Germany has produced several direct comparisons, including Berlin-based SPREAD, Cognee, and Qorelo, as well as Stuttgart's Blockbrain and Munich's Interloom. Including SAP's commitment to Prior Labs, the total activity referenced represents more than $3.1 billion. ### What This Means for the Future Today's acquisition by SAP allows Prior Labs to deploy these models across industries where enterprise data carries the most value. This deal enables Prior Labs to pursue multi-year frontier research programs that would have been out of reach for an 18-month-old company. Access to enterprise data environments and long-term investment will allow the company to pursue more ambitious research across enterprise AI, scientific discovery, causality, relational data, and agentic systems. They're even aiming at "moonshots" toward solving some of the most important problems of our time, like medical data and material sciences.