SAP has agreed to acquire Prior Labs, a two-year-old German AI startup, committing more than €1 billion over four years to scale it into a major AI research laboratory.
The deal comes just 15 months after Prior Labs closed its only funding round — a €9 million pre-seed led by Balderton Capital. It is expected to close in the second or third quarter of 2026, with acquisition details not being disclosed.
Prior Labs will continue to work as an independent company after the deal closes. This will help the startup keep moving fast in research while also using SAP’s scale, products, and customer reach.
“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,” says Frank Hutter, Prior Labs CEO.
Founded in 2024 by Frank Hutter, Noah Hollmann, and Sauraj Gambhir, Prior Labs is known for TabPFN, an open-source AI tool that has been downloaded more than 3 million times. Its latest model, TabPFN-2.6, is currently ranked as the top model on TabArena, a benchmark for tabular foundation models.
Prior Labs is working on tabular foundation models, which are AI models built specifically for this kind of data. This means the technology can help businesses make better predictions in areas such as late payments, supplier risk, customer churn, and sales opportunities.
Prior Labs’ direct competitive frame is AutoML pipelines, including tools like AutoGluon, H2O, and tuned gradient-boosted tree frameworks such as XGBoost, which TabPFN-2.6 benchmarks itself against on TabArena.
The acquisition will focus on structured data, which includes tables, numbers, and other business records that companies use every day. SAP said the deal builds on its earlier work in this field and brings in one of the strongest research teams working on tabular AI today.