SAP has entered into a definitive agreement to acquire Prior Labs, the pioneer of Tabular Foundation Models, in a deal that commits the enterprise software giant to investing more than €1 billion over the next four years to scale Prior Labs into a globally leading frontier AI research lab. Financial terms of the acquisition were not disclosed.
Prior Labs will continue to operate as an independent entity within the SAP family, maintaining its research velocity while gaining access to SAP’s enterprise data environment, customer reach, and productization pathway through SAP AI Core, SAP Business Data Cloud, and the Joule agentic layer. The transaction is expected to close in the second or third quarter of 2026, subject to regulatory approvals.
Prior Labs was founded by Frank Hutter, Noah Hollmann, and Sauraj Gambhir and has built one of the leading AI research teams globally, with researchers recruited from Google, Apple, Amazon, Microsoft, G-Research, Jane Street, Goldman Sachs, and CERN. The company’s TabPFN model series, published in Nature, has set state-of-the-art benchmarks across hundreds of independent academic studies and currently leads the TabArena benchmark for tabular foundation models. With more than 3 million downloads, Prior Labs’ open-source TabPFN tool has established a broad developer ecosystem, and SAP has committed to continuing to support that open-source strategy post-acquisition. The company’s TabPFN-2.6 model matches the accuracy of a four-hour automated machine learning pipeline instantly and in a single model.
The strategic rationale for the acquisition centers on a conviction SAP has held since early in the AI era: that the greatest untapped opportunity in enterprise AI is not large language models but AI purpose-built for the structured data that drives business operations. Large language models struggle with tables, numbers, and statistics, while Tabular Foundation Models are designed specifically for this type of data, enabling accurate predictions on payment delays, supplier risks, upsell opportunities, customer churn, and similar business outcomes. SAP CTO Philipp Herzig framed the acquisition as a way to combine Prior Labs’ frontier model work with SAP’s unmatched enterprise data and customer reach. Joining Prior Labs’ scientific advisory board are Yann LeCun, ACM A.M. Turing Award winner, and Bernhard Schölkopf, director of the Max Planck Institute for Intelligent Systems.
The combination positions SAP to lead the emerging category of tabular AI at enterprise scale, with a research lab structure designed to balance scientific independence with a direct path to commercial application across SAP’s portfolio of products used by millions of businesses worldwide.
KEY QUOTES:
“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. 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.”
Philipp Herzig, CTO, SAP
“Over the last 18 months, Prior Labs has built an incredible team, increasing the velocity in tabular foundation models. Joining the SAP family gives us the resources, data environment and customer reach to take this category to its full potential.”
Frank Hutter, CEO, Prior Labs
