SAP invests $1.16B in young German AI lab, adopts NemoClaw
▼ Summary
– SAP acquired German AI startup Prior Labs and plans to invest €1 billion over four years to grow it into an AI lab focused on structured data.
– Prior Labs develops tabular foundation models for data in tables and databases, which is more suited to enterprise needs than language models.
– SAP prohibits unauthorized AI agents from accessing its products through its API, only allowing SAP-endorsed architectures like its own Joule Agents and Nvidia’s NemoClaw.
– Prior Labs’ open-source TabPFN models have been downloaded over three million times, and SAP will maintain their open-source versions.
– The deal was primarily cash, with over half a billion dollars paid upfront to the founders, marking one of Germany’s largest venture outcomes.
In early 2026, the lingering question from OpenAI’s COO still hangs in the air: enterprise AI has yet to truly transform core business processes. For SAP, a European software giant that has seen its stock slide amid the so-called “SaaSpocalypse,” that challenge is now an urgent priority.
On Monday, SAP announced plans to acquire Prior Labs, a young German AI startup, for an undisclosed sum. Subject to regulatory approval, the company intends to invest €1 billion (roughly $1.16 billion) over four years to transform the startup into a dedicated AI lab focused on structured data , the tables and databases that underpin enterprise operations.
While SAP did not reveal the acquisition price, sources told Pathfounders that the deal marks a healthy exit for the founders. The transaction was described as “almost all cash,” with well over half a billion dollars paid upfront to co-founders Frank Hutter, Noah Hollmann, and Sauraj Gambhir.
The trio launched Prior Labs just 18 months ago, concentrating on tabular foundation models (TFMs) , AI models designed to analyze and predict outcomes from data stored in tables and databases. These models may be a more natural fit for enterprise needs than large language models, and they align perfectly with SAP’s core business. The company’s widely deployed software for accounting, HR, procurement, and expense management all depend heavily on database-driven structured data.
But Germany’s most valuable company is also playing defense as the tech industry races toward agentic AI. While building its own AI lab, SAP has blocked OpenClaw and any other agent technology it has not explicitly approved, as first reported by The Information. When asked for comment, SAP’s press team directed TechCrunch to its latest API policy, which states that AI agents are “prohibited” from accessing SAP products through its API unless they use “SAP-endorsed architectures.”
Among the authorized architectures is SAP’s own Joule Agents, still in beta, which enables customers to create custom agents. Additionally, Nvidia announced in March that SAP’s Joule now supports Nvidia’s Agent Toolkit, the software foundation for NemoClaw, Nvidia’s enterprise-grade, security-focused alternative to OpenClaw. As a result, SAP customers will be permitted to use NemoClaw agents.
For a legacy player like SAP, AI represents both a risk and a reward. “It’s all about how quickly we can also embark on these technologies in our R&D portfolio to keep the relative economies of scale advantage,” CFO Dominik Asam told CNBC in January.
SAP hasn’t been idle. In 2023, it invested in AI startups including Anthropic, Aleph Alpha, and Cohere , the latter two now planning to merge into a “global AI powerhouse.” The company also developed SAP-RPT-1, a relational pretrained transformer model. “Early on, SAP recognized 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,” CTO Philipp Herzig stated.
The Prior Labs acquisition accelerates that vision significantly. Its TabPFN model series has gained strong traction among developers. In a blog post, the startup’s founders noted that its open-source models have been downloaded over three million times.
SAP has committed to keeping Prior Labs’ open-source models available. In a press release, the company stated: “The lab will operate as an independent unit to ensure research velocity while SAP provides long-term investment and a direct path to productization across the SAP portfolio with SAP AI Core and SAP Business Data Cloud as well as the agentic layer with Joule.”
Together, SAP and Prior Labs aim to develop TFMs that can pull data directly from tables, combine it with language, reasoning, and domain knowledge. Founder and CEO Frank Hutter celebrated on X, calling the investment a “massive boost” that could help Prior Labs become a “globally-leading frontier AI lab for structured data , in Europe, in the open.”
Prior Labs raised roughly $9.3 million in a pre-seed round led by Balderton Capital in February 2025, surpassing competitor Neuralk-AI but falling far short of Fundamental, which emerged from stealth with a $255 million Series A in February.
Balderton partner James Wise called the acquisition “one of Germany’s biggest ever venture outcomes.” Meanwhile, SAP’s stock is trading slightly higher. The company’s strict control over which agents can enter its ecosystem stands in stark contrast to Salesforce, another incumbent hit by the SaaSpocalypse. Salesforce allows enterprises to choose their own agents, including OpenClaw, through its new Headless 360 architecture.
(Source: TechCrunch)
