Enterprise software giant SAP has bought the 18-month-old German AI startup Prior Labs for an undisclosed amount, with plans to invest €1 billion over four years. The move aims to grow Prior Labs into an AI lab focused on tabular foundation models (TFMs), which are better suited for enterprise data compared to language models.

Frank Hutter and his team co-founded Prior Labs in 2024, developing the TabPFN model series that has been downloaded over three million times. SAP’s investment will see these models integrated into its portfolio through products like SAP AI Core and Business Data Cloud.

While this acquisition is a significant step for SAP, it comes amid growing scrutiny of AI agents in enterprise ecosystems. The company has blocked OpenClaw and any unauthorized agent tech, reflecting a defensive stance as agentic AI becomes more prevalent.

In an interview with CNBC, CFO Dominik Asam said, ‘It’s all about how quickly we can embark on these technologies in our R&D portfolio to keep the relative economies of scale advantage.’ SAP has also invested in generative AI companies like Anthropic and Aleph Alpha, but Prior Labs offers a more direct route into structured data AI.

As SAP moves forward with this investment, it hopes that Prior Labs will become a globally-leading lab for structured data AI. SAP’s strict stance on agents in its ecosystem contrasts with competitors like Salesforce, allowing a wider range of agent technologies to coexist within their platforms.