SAP commits €1 billion to acquire Prior Labs and whitelists Nvidia's NemoClaw

SAP has announced plans to acquire German artificial intelligence startup Prior Labs, committing approximately €1 billion, or roughly $1.16 billion, to the business over the next four years. The deal, which remains pending regulatory approval, is designed to establish a dedicated AI lab focused on structured data. Sources indicate the transaction includes an upfront cash payment of well over half a billion dollars to the startup's founders, Frank Hutter, Noah Hollmann, and Sauraj Gambhir.

This strategic move distinguishes SAP from competitors who prioritise generic large language models, focusing instead on Tabular Foundation Models (TFMs). SAP CTO Philipp Herzig has stated that the greatest untapped opportunity in enterprise AI lies in the structured data found in databases rather than generic language capabilities. Prior Labs, founded just 18 months ago, specialises in these TFMs, with its open-source models reportedly downloaded over three million times prior to the acquisition.

Concurrent with the acquisition announcement, SAP has updated its API policy to prohibit unauthorised AI agents from accessing its products. The new governance framework explicitly permits the use of Nvidia's NemoClaw and SAP's own Joule Agents. This strict whitelist approach marks a significant shift from rival Salesforce, which allows enterprises to choose their own agents, including OpenClaw. SAP CFO Dominik Asam has noted the need to quickly embark on these technologies to maintain economies of scale advantage in the current market.

The acquisition represents a significant venture outcome for Germany, described by Balderton Capital partner James Wise as one of the country's biggest ever. Prior Labs had previously raised $9.3 million in a pre-seed round led by Balderton Capital in February 2025. This funding landscape contrasts with competitors like Neuralk-AI, which raised $255 million in a Series A round in February 2026, highlighting a competitive environment as the tech industry shifts towards agentic AI.

SAP has a history of investing in generative AI, having backed Anthropic in 2023 and previously developed its own relational pretrained transformer model, SAP-RPT-1. The company aims to leverage the acquired technology to combine data from enterprise tables with language and reasoning capabilities. SAP promises that the lab will operate as an independent unit to ensure research velocity while providing a direct path to productisation across its portfolio.

The announcement comes as SAP stock faces pressure in 2026 due to the downturn in the enterprise software sector, often referred to as the SaaSpocalypse. By controlling which agents can access its data through a strict whitelist, the company is playing a defensive role while simultaneously capitalising on the specific opportunity of structured data. The deal underscores SAP's intention to remain a leader in the enterprise space by focusing on the foundational data structures that run global businesses.