How an 18-Month-Old AI Lab Landed a $1 Billion SAP Exit

Jan de Vries · 2026-07-17

Berlin-based frontier AI lab Prior Labs just made headlines, announcing that SAP has completed its acquisition of the company. The deal comes with more than $1 billion in investment from SAP to fuel infrastructure, hiring, and long-term frontier research. Prior Labs will keep its own brand, leadership, and research agenda. It'll continue publishing its work and making its models openly available, all with SAP's backing. This all follows their $9 million pre-Seed round back in 2025. ### The Story Behind the Numbers "Eighteen months ago, Prior Labs was a research project," says Frank Hutter, co-founder and CEO. "Today we're beginning our next chapter as an AI lab with the resources to tackle problems we simply couldn't before. Taking tabular foundation models to the next level requires better data environments, deployment surfaces, and long-term research investment, and SAP is uniquely positioned to provide all of these." SAP's move isn't happening in a vacuum. The acquisition follows significant investment in European infrastructure needed to train, deploy, and govern enterprise AI. EU-Startups' 2026 coverage shows about $1.93 billion across comparable companies, led by Nscale's $1.7 billion AI-compute round and Verda's $100 million financing, plus investments in 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 activity referenced represents more than $2.93 billion. ### Why Enterprise AI Is Betting on Structured Data "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," adds Philipp Herzig, CTO of SAP. "Prior Labs has defined the category of TFMs and has built the world's strongest research team in this category, topping the public benchmarks since day one. Combining their frontier model work with enterprise data and customer reach is how we intend to lead this category globally." Founded in 2024, Prior Labs is an innovator of tabular foundation models (TFMs), a category of AI purpose-built for enterprise data. It was founded by Frank Hutter, Noah Hollmann, and Sauraj Gambhir. ### How TabPFN Works The company pioneered tabular foundation models (TFMs). Rather than requiring organizations to train a separate AI model for every dataset, TabPFN uses a single pre-trained foundation model capable of solving prediction tasks such as payment delays, churn, supplier risk, and demand forecasting directly from structured enterprise data. Its technology is already helping prevent train failures with Hitachi, improve financial forecasting with TD, and has been applied across hundreds of published research projects, from pancreatic cancer diagnosis to wildfire prediction to next-generation battery materials. ### What This Means for the Future Today's acquisition by SAP allows Prior Labs to deploy these models across the industries where enterprise data carries the most value. This 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 also eyeing even more ambitious "moonshots" toward solving some of the most important problems of our time, like medical data and material sciences. It's a bold move that shows how quickly things can change in the AI landscape. What started as a research project just 18 months ago is now a key piece of one of the world's largest enterprise software companies.