SAP to Acquire Prior Labs to Establish a Globally Leading Frontier AI Lab in Europe
On May 4, 2026, SAP SE (NYSE: SAP) announced its definitive agreement to acquire Prior Labs, a pioneer in Tabular Foundation Models (TFMs). This acquisition aims to accelerate SAP’s success in the field of TFMs, which began with the development of SAP-RPT-1. The deal will bring one of the world’s leading TFM research teams into the SAP family, with SAP committing to invest over €1 billion in the next four years to scale Prior Labs into a globally leading frontier AI lab focused on structured data.
Understanding Tabular Foundation Models
Large language models (LLMs) have shown limitations in making accurate predictions on structured business data due to their rudimentary understanding of tables, numbers, and statistics. In contrast, TFMs are specifically designed for structured data and can predict business outcomes based on various factors such as:
- Payment delays
- Supplier risks
- Upsell opportunities
- Customer churn risk
Statements from SAP and Prior Labs Executives
SAP’s Chief Technology Officer, Philipp Herzig, emphasized the strategic vision behind the acquisition, stating, “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.” He noted that the collaboration with Prior Labs would combine their frontier model work with SAP’s extensive enterprise data and customer reach.
Frank Hutter, CEO of Prior Labs, expressed enthusiasm about the acquisition, stating, “Joining the SAP family gives us the resources, data environment, and customer reach to take this category to its full potential.”
Establishing an Industry-Leading AI Research Lab
Once the acquisition is finalized, SAP will have the opportunity to establish an industry-leading AI research lab. This lab will operate independently to maintain research velocity while benefiting from SAP’s long-term investment and pathways to productization across the SAP portfolio. Key components of this integration will include:
- SAP AI Core
- SAP Business Data Cloud
- Agentic layer with Joule
Prior Labs’ Achievements and Innovations
Prior Labs has made significant advancements in the field of tabular AI. Their TabPFN model series has achieved remarkable success, with over 3 million downloads, and is widely regarded as a leading open-source tool for tabular AI. The TabPFN-2.6 model, in particular, has been recognized as the top performer on TabArena, a benchmark for TFMs. It matches the accuracy of a four-hour automated machine learning pipeline instantly and with reduced complexity.
Furthermore, Prior Labs’ models are designed to facilitate a conversational interface, enabling business users to:
- Ask questions in natural language
- Generate or select datasets
- Run “what-if” scenarios without needing extensive data science expertise
Enhancing Predictive Capabilities
With the integration of Prior Labs’ technology, SAP aims to provide in-context learning, allowing users to input data records and receive instant, reliable predictions without the need for model training. This adaptability means that a single TFM can cater to various business use cases dynamically, resulting in faster time-to-value while ensuring GDPR compliance.
Transforming the Future of AI in Business
Through this acquisition, SAP and Prior Labs plan to transform cutting-edge AI research into enterprise-ready innovations. This will empower customers to extract greater value from their tabular business data. SAP believes that true intelligence transcends mere correlation, aiming to understand causation as well. This approach will enable businesses to answer not just “What will happen?” but also “Why will it happen?”—a transformative capability.
Next Steps and Regulatory Approval
The acquisition is expected to close in the second or third quarter of 2026, pending customary closing conditions, including regulatory approvals. This strategic move positions SAP to lead in the frontier AI landscape, particularly in the realm of structured data.
About Prior Labs
Founded by Frank Hutter, Noah Hollmann, and Sauraj Gambhir, Prior Labs is renowned for pioneering Tabular Foundation Models. Their TabPFN model series has set state-of-the-art benchmarks across numerous independent academic studies. The company is headquartered in Freiburg, Germany, with additional offices in Berlin and New York City, and boasts a team of leading AI researchers recruited from top organizations such as Google, Apple, and CERN.
About SAP
SAP is a global leader in enterprise applications and business AI, trusted by organizations for over 50 years to enhance their operations across finance, procurement, HR, supply chain, and customer experience. For more information about SAP, visit www.sap.com.
Note: This article is based on the press release from SAP and may contain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those expressed or implied.
