SAP snaps up Dremio and Prior Labs in double AI acquisition

SAP has announced plans to acquire both Dremio and Prior Labs, as the enterprise software giant looks to expand its AI capabilities amid growing demand for data-driven intelligence.

Financial terms of the deals were not disclosed, but both transactions are expected to close in Q2 or Q3 2026, subject to regulatory approval.

According to SAP, the acquisition of Dremio will strengthen its data infrastructure layer, enabling customers to unify SAP and non-SAP data to more effectively run real-time analytic and AI workloads.

Specifically, the vendor said the move will enhance its Business Data Cloud and SAP HANA Cloud offerings to better address challenges around fragmented data environments.

The integration of Dremio’s lakehouse platform will provide a more open and scalable foundation for enterprise data, according to SAP, allowing organizations to access and analyze data across multiple systems without the need for complex data movement or transformation.

The platform’s serverless architecture is also expected to improve the cost and performance of large-scale analytics workloads.

“Enterprise AI doesn’t stall because the models aren’t good enough; it stalls because the data isn’t ready for AI agents,” commented Philipp Herzig, CTO at SAP SE.

“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.”

Post-acquisition, SAP said it will continue to invest in the open source projects at the heart of the Dremio platform – such as Apache Iceberg, Apache Polaris, and Apache Arrow.

SAP expands tabular AI capabilities

SAP has also moved to acquire Prior Labs, a specialist in tabular foundation models (TFMs), in a bid to strengthen its AI research capabilities and meet enterprise demand for AI that focuses on structured data.

As part of the deal, Prior Labs will continue to operate independently, with SAP committing to invest more than €1 billion over the next four years to scale the business into a global AI research hub.

The move builds on SAP’s existing work in tabular AI – including its SAP-RPT-1 model – and is expected to enhance the firm’s ability to deliver predictive insights from structured business data such as financial records, supply chain data, and customer information.

Unlike large language models (LLMs), which can struggle with structured datasets, TFMs are purpose-built for understanding and processing tabular data to enable more accurate predictions and business outcomes.

Commenting on the Prior Labs acquisition, Herzig said SAP sees significant untapped opportunity in AI that’s purpose-built for structured enterprise data.

“Prior Labs has built a leading TFM on public benchmarks and built one of the leading research teams in this category,” he explained.

“Combining their frontier model work with enterprise data and customer reach is how we intend to lead this category globally.”

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