SAP Invests $1.16B in Young German AI Lab and Backs NemoClaw

In a recent statement, OpenAI’s COO acknowledged a slow integration of AI into enterprise business processes. For SAP, a leader in enterprise software, this concern is increasingly relevant as it faces a declining stock market amidst the ongoing “SaaSpocalypse.”

On Monday, SAP, a prominent European player, revealed plans to acquire Prior Labs, a German startup specializing in AI, for an undisclosed sum. With pending regulatory approval, SAP aims to funnel €1 billion (around $1.16 billion) into this venture over the next four years, focusing on an AI lab that will handle structured data typically associated with enterprise operations.

While SAP has not disclosed the acquisition cost, sources have indicated that it was a lucrative deal, primarily in cash, with over half a billion dollars provided upfront to the startup’s founders — Frank Hutter, Noah Hollmann, and Sauraj Gambhir.

Founded just 18 months ago, Prior Labs specializes in tabular foundation models (TFMs) that can generate predictions from structured data, offering a potentially more suitable alternative for enterprise applications than traditional language models. This aligns well with SAP’s existing software, which relies heavily on databases for functions like accounting, HR, and procurement.

However, the acquisition also signals a defensive strategy as the technology sector progresses towards autonomous AI solutions. Reports indicate that SAP has blocked access to unauthorized AI technologies, including OpenClaw, an initiative that has not received explicit permission from the company, as first noted by The Information.

In a response to inquiries, SAP’s press team pointed to the company’s updated API policy, which specifies that access to its products via API is restricted to “SAP-endorsed architectures.”

Authorized architectures include SAP’s own Joule Agents, currently in beta, which facilitate the creation of custom agents. In partnership with Nvidia, SAP’s Joule integrates with Nvidia’s Agent Toolkit, allowing customers access to NemoClaw agents, a competitor to OpenClaw.

For an established company like SAP, the advancements in AI present both risks and opportunities. “Our speed in adopting these technologies within our R&D portfolio is crucial for maintaining our competitive edge,” noted CFO Dominik Asam in January, emphasizing the importance of AI integration.

SAP is proactive in this sphere, having already invested in several generative AI startups that focus on various scales of language models. These include backing for Anthropic, a rival to OpenAI, as well as support for Aleph Alpha and Cohere, two entities planning a merger.

Moreover, SAP has introduced SAP-RPT-1, a relational pretrained transformer model. According to SAP CTO Philipp Herzig, the company recognized early on that “the major unexploited opportunity in enterprise AI lay not within large language models, but rather in AI tailored for structured data.”

The acquisition of Prior Labs certainly accelerates this narrative. The startup’s TabPFN model series has gained notable traction, reportedly reaching over three million downloads of its open-source models, as indicated in a blog post from its founders.

SAP reassured stakeholders that Prior Labs will continue to uphold its open-source offerings. “This lab will function as an independent entity, promoting rapid research while benefiting from SAP’s long-term investment, with a clear path to integrate its products across the SAP ecosystem via SAP AI Core and SAP Business Data Cloud,” the company stated in a press release.

Located in Freiburg, Germany, SAP and Prior Labs aspire for this collaboration to foster TFMs capable of extracting data from existing tables and combining it with language comprehension and domain expertise.

With this significant backing, the founders of Prior Labs envision creating a leading AI lab for structured data, an ambition communicated enthusiastically by CEO Frank Hutter in a post on X.

Previously, in February 2025, Prior Labs secured €9.3 million in a pre-seed funding round led by Balderton Capital— an amount surpassing its competitor Neuralk-AI’s funding but less than Fundamental’s recent Series A of $255 million.

Balderton partner James Wise described the acquisition as “one of Germany’s biggest ever venture outcomes” in a post on X. Currently, SAP’s stock appears to be trending upwards.

Conversely, SAP’s restrictive stance regarding allowed agents stands in stark contrast to Salesforce’s approach; the latter allows enterprises the freedom to select their agents, including OpenClaw, as part of its new Headless 360 architecture.