Germany's SAP is buying a young Berlin AI startup called Prior Labs and will commit one billion euros (1.16 billion dollars) to the same company over the next four years. The price of the acquisition itself has not been disclosed, but sources say it is a mostly cash deal in which the founders walk away with more than half a billion dollars upfront.

Prior Labs is only 18 months old. It was founded by Frank Hutter, Noah Hollmann and Sauraj Gambhir, and works on what the industry calls tabular foundation models - artificial intelligence built for structured data in tables and databases, not for language. Their open-source model TabPFN has been downloaded more than three million times.

For SAP this deal is a response to something obvious - large language models like ChatGPT and Claude are not where the enterprise lives. The business world is built on databases, ERP systems and spreadsheets. „SAP's early recognition was that the biggest untapped opportunity in enterprise AI was not in large language models; it was in AI built for the structured data that runs businesses around the world," said SAP's chief technology officer, Philipp Herzig.

Prior Labs will run as an independent unit inside SAP, but its technology will be integrated across Joule Agents, SAP AI Core and SAP Business Data Cloud. The open-source versions of the models remain open - at least that is the announcement.

At the same time, SAP is closing the door to competition. Only approved AI agents - SAP's Joule Agents and Nvidia's NemoClaw - will have access to the systems. OpenClaw and other unwanted agents are blocked. That is the classic move of a big player suddenly deciding that its platform is also the standard.

For the German founder Hutter, this is something that rarely happens in the European AI landscape. „A massive boost" that will allow Prior Labs to become „the new globally leading frontier AI lab for structured data - in Europe, openly," he said. Whether one billion euros is enough for that is another question - but at least the money comes from a European company, not from Silicon Valley.