SAP To Buy Dremio And Prior Labs To ‘Lead’ Agentic And AI Models

SAP unveils plans to acquire Dremio and Prior Labs to take its agentic AI portfolio and Tabular Foundation Models to the next level.

SAP is elevating its AI strategy with the acquisitions of data lakehouse platform provider Dremio and AI foundational model specialist Prior Labs, along with a $1.1 billion investment commitment to scale Prior Labs.

With the planned purchase of Dremio, SAP Business Data Cloud will become an Apache Iceberg-native enterprise lakehouse that unifies SAP and non-SAP data to power agentic AI at enterprise scale.

“Enterprise AI doesn’t stall because the models aren’t good enough; it stalls because the data isn’t ready for AI agents,” said Philipp Herzig, CTO of SAP SE, in a statement. “Dremio eliminates that bottleneck. Combined with SAP Business Data Cloud, we can now take customers from raw, fragmented data to governed, AI-ready intelligence on a single open platform.”

Tabular Foundation Model (TFM) pioneer Prior Labs looks to boost SAP’s success in AI foundation models along with SAP’s commitment to invest more than $1.1 billion to scale Prior Labs globally.

“We built SAP-RPT-1 to prove that conviction for enterprise data,” Herzig said. “Prior Labs has built a leading TFM on public benchmarks and built one of the leading research teams in this category. Combining their frontier model work with enterprise data and customer reach is how we intend to lead this category globally.”

Financial terms of both deals were not disclosed.

Both deals are expected to close by the third quarter of 2026.

Why Is SAP Acquiring Dremio?

Dremio provides an open data lakehouse platform built to accelerate agentic AI and expand SAP Business Data Cloud’s capabilities.

Dremio’s Agentic Lakehouse is dubbed as the only Iceberg-native data platform built for agents and managed by agents.

By acquiring Dremio, SAP will boost its Business Data Cloud and SAP HANA Cloud offerings to ensure seamless data integration across SAP and non-SAP data with high performance and low cost to accelerate AI-ready context and time-to-value for AI.

The Dremio lakehouse platform is serverless and elastic, scaling up automatically when demand spikes and scaling back down when it subsides—meaning no fixed capacity to provision and no performance ceiling when it matters most.

SAP Business Data Cloud will natively support Apache Iceberg as its foundation.

In addition, Dremio and SAP will provide a universal, open catalog built on Apache Polaris and the open Apache Iceberg REST Catalog API.

Why Is SAP Buying Prior Labs? $1.1 Billion Investment Ahead

SAP said Prior Labs will remain an independent company, with SAP pledging more than $1.1 billion over the next four years to scale the startup into a global frontier AI lab focused on enterprise structured data.

SAP aims to establish an industry-leading AI research lab and shape a new category in TFMs.

With over 3 million downloads, Prior Labs’ TabPFN is a widely adopted open-source tool for tabular AI.

SAP said large language models (LLMs) struggle to make accurate predictions on structured business data because they have only a rudimentary understanding of tables, numbers and statistics.

Unlike LLMs, Tabular Foundation Models (TFMs) are purpose-built for structured data, enabling more accurate predictions of business outcomes such as payment delays, supplier risk, upsell opportunities and customer churn.

After the deal finalizes, SAP and Prior Labs plan to turn its top AI research into enterprise-ready innovation, allowing customers to get even more value out of their tabular business data.