SAP backs German AI startup NemoClaw in $1.16B strategic investment

By OpenAI COO’s own admission last February, “we have not yet really seen AI penetrate enterprise business processes.” But for enterprise software giant SAP, whose stock has declined notably in 2026 partly due to the ongoing “SaaSpocalypse,” the issue remains a key focus.

On Monday, the European company announced plans to acquire German AI startup Prior Labs for an undisclosed sum. Subject to regulatory approval, SAP intends to invest €1 billion (around $1.16 billion) into the business over the next four years, aiming to develop it into an AI research lab specialising in structured data — the tables and databases that underpin enterprise systems.

SAP did not reveal the purchase price for the acquisition. Still, sources told Pathfounders that the deal represents a significant exit, described as “almost all cash,” with well over half a billion dollars paid upfront to the startup’s founders — Frank Hutter, Noah Hollmann, and Sauraj Gambhir.

The founders launched Prior Labs just 18 months ago, focusing on tabular foundation models (TFMs), which are designed to generate predictions from structured data stored in tables and databases. These models are viewed as particularly relevant for enterprise environments, especially for SAP, whose software products for accounting, human resources, procurement, and expense management rely heavily on structured databases.

At the same time, SAP appears to be taking a defensive stance as the industry moves toward agentic AI. While building its own AI capabilities, the company has restricted access to external agent technologies, such as OpenClaw, unless explicitly approved. The Information first reported this approach.

In response to inquiries, SAP pointed to its updated API policy, which states that it “prohibits” AI agents from accessing its systems unless they operate within “SAP-endorsed architectures.”

These approved systems include SAP’s own Joule Agents, currently in beta, which allow customers to build custom AI agents. NVIDIA also announced in March that Joule integrates with its Agent Toolkit, a framework for managing AI agents. This toolkit underpins Nvidia’s enterprise deployment approach, including its system known as NemoClaw, meaning SAP customers can use NemoClaw-based agents within approved environments.

For an established player like SAP, AI represents both a risk 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 said in an earlier interview with CNBC.

SAP has already made several moves in this direction. In 2023, it invested in generative AI companies, including Anthropic, Aleph Alpha, and Cohere, which are now planning to merge into what they describe as a “global AI powerhouse.”

The company has also developed its own model, SAP-RPT-1, a relational pretrained transformer. “Early on, SAP recognised 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.

The acquisition of Prior Labs accelerates this strategy. Its TabPFN model series has gained significant traction among developers, with the founders noting in a blog post that their open-source models have been downloaded more than 3 million times.

SAP stated in a press release that Prior Labs will continue to maintain its open-source offerings. “The lab will operate as an independent unit to ensure research velocity while SAP provides long-term investment and a direct path to productisation across the SAP portfolio with SAP AI Core and SAP Business Data Cloud, as well as the agentic layer with Joule,” the company said.

Together, SAP and the Freiburg-based startup aim to build models that can work directly with structured data while integrating language understanding, reasoning, and domain-specific knowledge.

Founder and CEO Frank Hutter described the investment as a “massive boost,” expressing optimism that Prior Labs could evolve into a leading global AI lab focused on structured data, particularly in Europe and the open-source ecosystem.

Prior Labs raised around $9.3 million in a pre-seed funding round in February 2025, led by Balderton Capital — a modest sum compared to competitors like Neuralk-AI and far below the $255 million Series A raised by Fundamental earlier this year.

Balderton partner James Wise described the acquisition as “one of Germany’s biggest ever venture outcomes.” Meanwhile, SAP’s stock has shown slight upward movement following the announcement.

SAP’s cautious approach to AI agents contrasts with competitors like Salesforce, which has taken a more open stance. Through its Headless 360 architecture, Salesforce allows enterprises to deploy a wider range of agents, including OpenClaw, if they choose.