SAP acquires German AI startup Prior Labs with a €1 billion…

Team S · 2026-05-07T14:05:14.000Z

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 external funding round — a €9 million pre-seed led by Balderton Capital — and is expected to close in the second or third quarter of 2026. Financial terms of the acquisition were not disclosed. Prior Labs was founded in 2024 by Frank Hutter, Noah Hollmann, and Sauraj Gambhir. It is best known for TabPFN, an open-source AI tool that has been downloaded more than 3 million times, and its latest model TabPFN-2.6, which is currently ranked first on TabArena, a benchmark for tabular foundation models. The company specialises in tabular AI — models built specifically for structured data such as tables, numbers, and business records — enabling businesses to make more accurate predictions around late payments, supplier risk, customer churn, and sales opportunities. Despite the acquisition, Prior Labs will continue to operate as an independent company, allowing it to maintain its research pace while leveraging SAP's scale, products, and customer reach. SAP said the deal builds on its existing work in structured data AI and brings in one of the strongest research teams in the tabular AI field. "Joining the SAP family gives us the resources, data environment, and customer reach to take this category to its full potential," said CEO Frank Hutter. Prior Labs' main competitive frame is against AutoML pipelines such as AutoGluon, H2O, and XGBoost — tools that TabPFN-2.6 outperforms on leading benchmarks.

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SAP acquires German AI startup Prior Labs with a €1 billion… | Newnex