SAP to acquire Prior Labs and Dremio to bolster AI efforts

Germany-based software company SAP has reached agreements to acquire Prior Labs and Dremio, aiming to advance its AI research and unify enterprise data management.

Financial terms for both agreements have not been disclosed.

SAP stated that, pending regulatory approval, it will integrate Prior Labs as an independent entity while investing over €1bn ($1.17bn) across four years to develop a frontier AI laboratory in Europe. This transaction is expected to close in either the second or third quarter of 2026, subject to regulatory clearance.

Prior Labs, a developer of Tabular Foundation Models (TFMs), will operate independently but with SAP’s investment supporting scale and additional research.

SAP intends to leverage Prior Labs’ TFM models for improved prediction capabilities on structured business data, which differs from the capacity of large language models.

SAP’s earlier work with SAP-RPT-1 marked its initial involvement with TFMs. Bringing Prior Labs’ research team in-house aligns with SAP’s objective to accelerate product development and AI adoption within the SAP portfolio, including SAP AI Core and SAP Business Data Cloud.

The research team at Prior Labs includes its co-founders and established figures from the AI field, with Yann LeCun and Bernhard Schoelkopf joining the scientific advisory board.

Prior Labs’ open-source tabular AI tool, TabPFN, has seen over three million downloads, reflecting its reach within the developer community. SAP has committed to maintaining the open-source direction.

The most recent model, TabPFN-2.6, leads benchmark performance for TFMs by delivering instant prediction capabilities on structured data without the complexity of traditional machine learning pipelines.

SAP aims to use these models to enable business users to analyse data and run predictive scenarios using natural language prompts, minimising the required technical expertise.

SAP chief technology officer (CTO) Philipp Herzig said: “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.”

Dremio, SAP’s other acquisition, is a data lakehouse platform. The former’s technology will be integrated to streamline enterprise analytics and enhance SAP Business Data Cloud’s compatibility with SAP and non-SAP data sources.

SAP stated that fragmentation and lack of context in enterprise data often slow AI projects, and Dremio provides a solution to this by supporting open formats and eliminating the need for data conversion or relocation.

The integration will use Apache Iceberg to provide a standard table format, with SAP HANA Cloud supporting operational transactions.

Dremio’s platform is designed to operate serverlessly, adjusting computing capacity according to demand.

SAP will introduce a unified, open catalogue using Apache Polaris and the Apache Iceberg REST API, which will facilitate seamless discovery and semantic data management across enterprise systems.

Dremio’s continued contributions to open-source projects, including Apache Iceberg and Apache Arrow, will remain a priority after the acquisition. The acquisition is anticipated to close in the third quarter of this year, contingent on regulatory approvals and other customary closing conditions.

"SAP to acquire Prior Labs and Dremio to bolster AI efforts" was originally created and published by Verdict, a GlobalData owned brand.

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