SAP bets $1.16B on 18-month-old German AI lab and says yes to NemoClaw

By OpenAI COO’s own admission last February, “we have not yet really seen AI penetrate enterprise business processes.” For enterprise software giant SAP, whose stock has dropped significantly in 2026 in part from the “SaaSpocalypse,” the issue remains front and center.

SAP to acquire Prior Labs and invest €1B

On Monday, SAP announced its intention to acquire German AI startup Prior Labs for an undisclosed amount. Pending regulatory approval, SAP plans to invest €1 billion (approximately $1.16 billion) into the business over the next four years to grow it into an AI lab focused on structured data — the tables and databases where enterprise information typically sits.

SAP declined to disclose how much it spent on the acquisition itself, but sources told Pathfounders that this was an “almost all cash” deal, with well over half a billion dollars in cash up front for the startup’s founders — Frank Hutter, Noah Hollmann, and Sauraj Gambhir.

The trio co-founded Prior Labs just 18 months ago with a focus on tabular foundation models (TFMs), AI models that can make predictions from data stored in tables and databases. This approach is potentially a better fit for enterprises than language models, and especially relevant for SAP, whose software products for accounting, HR, procurement, and expense management rely heavily on structured databases.

A defensive move in the age of agentic AI

As the tech industry moves toward agentic AI, SAP appears to be playing defense while building out its own AI capabilities. The company has blocked OpenClaw and other agent technologies that it has not explicitly authorized, as first reported by The Information.

In response to a request for comment, SAP referred to its latest API policy, which states that SAP “prohibits” AI agents from accessing its products through its API except for those that are “SAP-endorsed architectures.”

Authorized architectures include SAP’s own offering, Joule Agents, still in beta, which allows customers to create their own agents. In March, Nvidia announced that SAP’s Joule supports Nvidia’s Agent Toolkit, software for managing agents. This toolkit forms the foundation for Nvidia’s enterprise-ready, security-focused OpenClaw competitor, NemoClaw. As a result, SAP customers will be authorized to use NemoClaw agents.

AI as both threat and opportunity

For a major incumbent like SAP, AI represents both a threat and an opportunity. “It’s all about how quickly [we can] as SAP actually 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 has already invested in generative AI companies developing language models. In 2023, it backed OpenAI rival Anthropic, as well as Aleph Alpha and Cohere, which now intend to merge to form “a global AI powerhouse.” SAP 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,” SAP CTO Philipp Herzig said in a statement.

Prior Labs’ traction and open source commitment

The acquisition of Prior Labs is a significant shortcut toward SAP’s structured data ambitions. The startup’s TabPFN model series has gained strong traction among developers. In a blog post about the deal, the founders said their open source models have been downloaded more than three million times.

In a press release, SAP said Prior Labs will maintain its open source versions: “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.”

Headquartered in Freiburg, Germany, Prior Labs aims to build TFMs that can work directly with structured data in enterprise tables, combining it with language, reasoning, and domain knowledge.

Founder and CEO Frank Hutter said in a post on X that with SAP’s “massive boost,” Prior Labs could become a new “globally-leading frontier AI lab for structured data — in Europe, in the open.”

In February 2025, the startup had previously raised a pre-seed round led by Balderton Capital. On X, Balderton partner James Wise called Prior Labs’ acquisition “one of Germany’s biggest ever venture outcomes.”

A different approach from Salesforce

SAP’s restrictive stance on agents contrasts with Salesforce, another incumbent affected by the SaaSpocalypse. Salesforce is allowing enterprises to choose their own agents, including OpenClaw, through its new Headless 360 architecture.

As SAP doubles down on structured data AI with a €1 billion investment while tightly controlling its ecosystem, the company is making clear that it intends to shape how agentic AI integrates into enterprise software.