SAP has agreed to acquire Freiburg-based AI startup Prior Labs, which builds tabular foundation models designed to analyze business data in spreadsheets and databases. The software giant will invest more than €1bn in the startup over the next four years to scale it globally, though the acquisition amount remains undisclosed.

The deal represents a remarkably fast exit for a European startup: Prior Labs raised its only €9m funding round in February 2024, making this acquisition happen in under 15 months. The startup's backers include Balderton Capital, Atlantic Labs, XTX Ventures, and angels such as Hugging Face cofounder Thomas Wolf and Black Forest Labs cofounder Robin Rombach.

The acquisition gives SAP a foothold in the growing market for AI built specifically for structured enterprise data. "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," said SAP CTO Philipp Herzig. Former Meta chief AI scientist Yann LeCun serves as an advisor to Prior Labs.