SAP has agreed to acquire two-year-old German AI startup Prior Labs, pledging more than €1 billion over four years to expand the company into a leading AI research lab.
The deal comes just 15 months after Prior Labs closed its only funding round, a €9 million pre-seed led by Balderton Capital. Details of the acquisition were not disclosed, but it is expected to close in the second or third quarter of 2026.
Prior Labs will continue to operate as an independent company following completion of the transaction. This allows startups to continue moving their research forward quickly while leveraging SAP’s scale, products, and customer reach.
“Over the past 18 months, Prior Labs has built an incredible team and brought speed to our fundamental tabular models. Joining the SAP family gives us the resources, data environment, and customer reach to realize the full potential of this category,” said Frank Hutter, CEO of Prior Labs.
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 over 3 million times. Its latest model, TabPFN-2.6, currently ranks as the top model on TabArena, a benchmark for tabular foundational models.
Prior Labs is working on Tabular Fundamentals, an AI model built specifically for this type of data. This means the technology can help companies make better predictions in areas such as payment delays, supplier risk, customer churn, and sales opportunities.
Prior Labs’ direct competing frames are AutoML pipelines, including tools such as AutoGluon, H2O, and tuned gradient-boosting tree frameworks such as XGBoost, which TabPFN-2.6 benchmarks on TabArena.
The acquisition will focus on structured data, which includes tables, numbers, and other business records that companies use on a daily basis. SAP said the deal builds on its previous work in this area and brings in one of the strongest research teams currently working on tabular AI.
