OpenAI’s COO admitted in February that AI hasn’t really changed how businesses work yet. But for SAP, a huge company that makes software for businesses, AI is a top priority, especially after its stock dropped significantly this year.
The German tech giant announced it plans to buy the German AI startup Prior Labs. SAP will invest €1 billion (about $1.16 billion) into the company over the next four years. Their goal is to turn Prior Labs into an AI research center focused on “structured data”—the tables and databases where most business information lives.
SAP didn’t say how much it paid for the acquisition itself. However, sources told Pathfounders that it was a very good deal for the startup’s founders—Frank Hutter, Noah Hollmann, and Sauraj Gambhir—with an “almost all cash” deal providing them with well over half a billion dollars upfront.
The three founders started Prior Labs just 18 months ago. They focused on creating “tabular foundation models” (TFMs), which are AI models that can make predictions from data found in tables and databases. These models are likely a better fit for businesses, and definitely a better fit for SAP, whose widely used software for things like accounting and HR relies heavily on databases.
However, Germany’s most valuable company also seems to be playing defense as the tech world moves towards “agentic AI.” While building its own AI lab, SAP has blocked OpenClaw and any other AI agent technology it hasn’t specifically approved, as The Information first reported. SAP’s press office referred TechCrunch to its latest API policy, which states that SAP “prohibits” AI agents from accessing its products through its API unless they are “SAP-endorsed architectures.”
Of course, SAP’s own offering, Joule Agents, which is still in testing and lets customers create their own agents, is an authorized architecture. Nvidia also announced in March that SAP’s Joule supports Nvidia’s Agent Toolkit, software for managing agents. This toolkit is the base for Nvidia’s secure, business-ready competitor to OpenClaw, called NemoClaw. So, SAP customers will be allowed to use NemoClaw agents.
For a big, established company like SAP, AI is both a challenge and an opportunity. SAP’s CFO, Dominik Asam, told CNBC in January, “It’s all about how quickly we, as SAP, can actually bring these technologies into our research and development to keep our advantage of scale.”
SAP hasn’t been sitting idle. In 2023, the German company invested in generative AI companies that make language models, both big and small. It backed OpenAI competitor Anthropic, as well as Aleph Alpha and Cohere, which now plan to merge and form a “global AI powerhouse.”
SAP also developed SAP-RPT-1, its own relational pretrained transformer model. SAP CTO Philipp Herzig stated, “Early on, SAP realized that the biggest untapped opportunity in business AI wasn’t large language models; it was AI built for the structured data that runs the world’s businesses.”
But buying Prior Labs is a big shortcut in that direction. Its TabPFN model series has become very popular among developers. In a blog post about the deal, the startup’s founders mentioned that their open-source models have been downloaded over three million times.
In a press release, SAP promised that Prior Labs will continue to maintain the open-source versions. The company said, “The lab will work independently to ensure fast research, while SAP provides long-term investment and a direct path to put its products into use across SAP’s offerings with SAP AI Core and SAP Business Data Cloud, as well as the agentic layer with Joule.”
SAP and the startup, located in Freiburg, Germany, hope this investment will lead to TFMs that can gather data from tables, combine it with language, reasoning, and specialized knowledge. Even more, Prior Labs’ founder and CEO, Frank Hutter, shared on X that they hope Prior Labs, with this “massive boost” from SAP, can become a new “globally-leading frontier AI lab for structured data—in Europe, in the open.”
In February 2025, the startup had previously raised about $9.3 million in an early funding round led by Balderton Capital. This was more than competitor Neuralk-AI, but much less than Fundamental, which launched with a $255 million Series A round in February. Balderton partner James Wise called Prior Labs’ acquisition “one of Germany’s biggest ever venture outcomes” in a post on X. As for SAP, its stock is currently trading slightly higher.
Meanwhile, SAP is very strict about which agents it will allow into its system. This is a very different approach from Salesforce, another big company facing similar challenges. Salesforce is allowing businesses to choose their own agents, including others.
