SAP Plans Acquisition of Prior Labs to Expand AI Research

SAP SE has announced an agreement to acquire Prior Labs, a specialist in Tabular Foundation Models (TFMs), as part of plans to expand its research capabilities in structured data and enterprise AI.

Under the terms of the agreement, Prior Labs will continue to operate as an independent entity. SAP has committed to investing more than €1 billion over the next four years to scale Prior Labs into a frontier AI research lab focused on structured business data. Financial terms of the acquisition were not disclosed, and the transaction remains subject to regulatory approval.

The acquisition builds on SAP’s earlier work in tabular AI, including the development of SAP‑RPT‑1, and brings Prior Labs’ research team into the SAP organisation. Unlike large language models (LLMs), which often struggle with structured data such as tables, numerical values, and statistical relationships, TFMs are designed specifically for tabular datasets and can support predictive use cases including payment delays, supplier risk, churn prediction, and upsell opportunities.

“Early on, SAP recognised 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,” SAP CTO Philipp Herzig said. “We built SAP-RPT-1 to prove that conviction for enterprise data. Prior Labs has built a leading TFM on public benchmarks and built one of the leading research teams in this category. Combining their frontier model work with enterprise data and customer reach is how we intend to lead this category globally.”

Prior Labs CEO Frank Hutter said the acquisition provides access to resources and scale:

“Over the last 18 months, Prior Labs has built an incredible team, increasing the velocity in tabular foundation models,” Prior Labs CEO Frank Hutter said. “Joining the SAP family gives us the resources, data environment and customer reach to take this category to its full potential.”

Following completion of the transaction, SAP plans to establish an AI research lab focused on tabular foundation models. The lab will operate independently to maintain research momentum, while SAP provides long‑term investment and pathways to product integration across SAP AI Core, SAP Business Data Cloud, and Joule.

Prior Labs is the developer of TabPFN, an open‑source tool for tabular AI that has recorded more than 3 million downloads and supports a broad developer ecosystem. SAP has indicated it will continue to support this open‑source strategy. Prior Labs’ leadership team includes cofounders Frank Hutter, Noah Hollmann and Sauraj Gambhir, alongside a research group collaborating with external experts such as Yann LeCun and Bernhard Schoelkopf, who will serve on the company’s scientific advisory board.

Among its technical milestones, Prior Labs’ TabPFN‑2.6 model currently ranks as the top‑performing system on the TabArena benchmark for TFMs. The model delivers results comparable to extended automated machine learning workflows but within a single model and without lengthy processing times.

SAP plans to integrate Prior Labs’ models with conversational interfaces that allow business users to interact with tabular data using natural language, generate datasets, and conduct scenario analysis without specialist machine learning expertise. The models are designed to support in‑context learning, enabling predictions without additional model training and aligning with GDPR requirements.

After the transaction closes, SAP and Prior Labs intend to translate research outputs into enterprise‑ready capabilities across SAP’s product portfolio, with a focus on predictive accuracy and causal reasoning from structured data.

The acquisition is expected to close in Q2 or Q3 of 2026, subject to customary closing conditions, including regulatory approvals.