SAP SE and Prior Labs, the pioneer of Tabular Foundation Models (TFMs), announced that they have entered into a definitive agreement for SAP to purchase Prior Labs, accelerating SAP’s success in TFMs that started with SAP-RPT-1, and bringing one of the world’s leading TFM research teams into the SAP family.

Prior Labs will continue to operate as an independent entity, with SAP committing to invest more than €1 billion over the next four years to scale it into a globally leading frontier AI lab for the structured data that runs the world’s businesses. Terms of the deal were not disclosed. The transaction is still pending regulatory approval.

Large language models (LLMs) struggle to make accurate predictions on structured business data because they have only a rudimentary understanding of tables, numbers and statistics. Unlike LLMs, TFMs are purpose-built for this type of data and can accurately predict business outcomes based on tabular data such as payment delays, supplier risks, upsell opportunities, customer churn risk and more.

“Early on, SAP recognised 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,” SAP CTO Philipp Herzig said. “We built SAP-RPT-1 to prove that conviction for enterprise data. Prior Labs has built a leading TFM on public benchmarks and built one of the leading research teams in this category. Combining their frontier model work with enterprise data and customer reach is how we intend to lead this category globally.”

“Over the last 18 months, Prior Labs has built an incredible team, increasing the velocity in tabular foundation models,” Prior Labs CEO Frank Hutter said. “Joining the SAP family gives us the resources, data environment and customer reach to take this category to its full potential.”

Once the transaction is closed, with Prior Labs, SAP will have the special opportunity to establish an industry-leading AI research lab and shape a new category in TFMs. The lab will operate as an independent unit to ensure research velocity, while SAP provides long-term investment and a direct path to productisation across the SAP portfolio with SAP AI Core and SAP Business Data Cloud, as well as the agentic layer with Joule.

With over 3 million downloads, Prior Labs’ TabPFN is a widely adopted open-source tool for tabular AI, supporting a dynamic developer ecosystem. SAP is fully committed to further support this open-source strategy. The Prior Labs cofounders Frank Hutter, Noah Hollmann and Sauraj Gambhir lead a team of world-class AI researchers and practitioners. The company works with leading scientists in the field, including Yann LeCun, ACM A.M. Turing Award winner and executive chairman at Advanced Machine Intelligence, and Bernhard Schoelkopf, director of Max Planck Institute for Intelligent Systems and ELLIS president, both of whom will serve on Prior Labs’ scientific advisory board as it scales to a globally leading frontier AI lab.