SAP to invest €1 billion in newly acquired German AI startup Prior Labs

SAP announced on Monday its intention to acquire German AI startup Prior Labs for an undisclosed amount. Pending regulatory approval, the enterprise software giant plans to invest €1 billion (approximately $1.16 billion) into the business over the next four years, aiming to grow it into an AI lab focused on structured data — the tables and databases where enterprise information typically sits.

SAP declined to disclose what it paid for the acquisition itself, but sources told Pathfounders it was a healthy exit: an almost-all-cash deal that delivered well over half a billion dollars in cash upfront to Prior Labs’ founders, Frank Hutter, Noah Hollmann and Sauraj Gambhir. The trio founded Prior Labs just 18 months ago to build tabular foundation models (TFMs) — AI models that make predictions from data stored in tables and databases, a potentially better fit for enterprise software than large language models. Prior Labs’ open-source TabPFN model series has been downloaded more than three million times, its founders said.

SAP plans to keep Prior Labs operating as an independent unit while folding its work into SAP AI Core, SAP Business Data Cloud, and the Joule agentic layer. Frank Hutter, Prior Labs’ founder and CEO, said the investment could turn the startup into a “globally-leading frontier AI lab for structured data — in Europe, in the open.” In February 2025, Prior Labs had raised some $9.3 million in a pre-seed round led by Balderton Capital — more than rival Neuralk-AI raised, though far less than the $255 million Series A that competitor Fundamental raised out of stealth. Balderton partner James Wise called the acquisition one of Germany’s biggest-ever venture outcomes, and SAP’s stock was trading slightly upwards as of the announcement.

The deal comes as SAP moves to restrict which AI agents can access its products; as The Information first reported, the company has blocked OpenClaw and any other agent technology it has not explicitly authorized, permitting only SAP-endorsed architectures under its API policy. Approved options include SAP’s own Joule Agents, still in beta, and NemoClaw — Nvidia’s enterprise-focused method for deploying OpenClaw, which SAP customers will be authorized to use after Nvidia said in March that Joule supports its Agent Toolkit.

Why it matters

The deal gives SAP a shortcut into AI built for enterprise data rather than general-purpose language models, while its agent-access restrictions mark a stricter approach than rivals like Salesforce, which lets customers choose their own agents.