SAP Acquires Prior Labs for $1.1 Billion Just 18 Months After Founding

Jan de Vries · 2026-07-17

Berlin-based frontier AI lab Prior Labs just announced that SAP has completed its acquisition of the company. SAP has backed this deal with more than $1.1 billion in investment to fund infrastructure, hiring, and long-term frontier research. Prior Labs will continue operating under its own brand, leadership, research agenda, and customer relationships. They'll still publish their research and make their models openly available, all with SAP's support. This comes after their $9.8 million pre-Seed round in 2025. ### From Research Project to Billion-Dollar Exit "Eighteen months ago, Prior Labs was a research project," says Frank Hutter, co-founder and CEO of Prior Labs. "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 acquisition, supported by more than $1.1 billion, follows substantial investment in the European infrastructure needed to train, deploy, and govern enterprise AI. EU-Startups' 2026 coverage includes approximately $2.1 billion across comparable and adjacent companies, led by Nscale's $1.85 billion AI-compute round and Verda's $109 million financing, alongside investments in enterprise data, memory, and ERP infrastructure at Conduct, OpsMill, and Modern Relay. ### The Bigger Picture in European AI 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 $3.2 billion. "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." ### What Are Tabular Foundation Models? 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. The company pioneered TFMs, which solve a real pain point. Rather than requiring organizations to train a separate AI model for every dataset, their 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. ### Real-World Impact Already Happening Its technology is already helping prevent train failures with Hitachi and improving financial forecasting with TD. It's been applied across hundreds of published research projects, from pancreatic cancer diagnosis to wildfire prediction to next-generation battery materials. Today's acquisition by SAP allows Prior Labs to deploy these models across the industries where enterprise data carries the most value. This enables them to pursue multi-year frontier research programs that would have been out of reach for an 18-month-old company. ### What's Next for Prior Labs 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 eyeing "moonshots" toward solving some of the most important problems of our time, like medical data and material sciences. - Key takeaway: Prior Labs went from a research project to a billion-dollar exit in just 18 months - The deal shows SAP's commitment to structured data AI over large language models - Prior Labs' TabPFN technology is already deployed in real-world applications This acquisition marks a significant moment for European AI. It proves that focused research on niche problems like tabular data can attract massive investment and change how enterprises use AI. For startups watching from the sidelines, it's a reminder that solving a specific, hard problem well can lead to outsized outcomes.