SAP bags Dremio and Prior Labs in enterprise AI data push

SAP plans to buy agentic lakehouse business Dremio and tabular data AI model developer Prior Labs.

The enterprise software giant wants to enhance its fully managed SaaS Business Data Cloud offering by having Dremio provide real-time analytics and agentic AI access to non-SAP data. SAP Business Data Cloud with Dremio will become an Apache Iceberg-native enterprise lakehouse, unifying SAP and non-SAP data "to power agentic AI at enterprise scale."

Philipp Herzig, CTO, SAP SE, said: "Enterprise AI doesn't stall because the models aren't good enough; it stalls because the data isn't ready for AI agents. 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."

VC-backed Dremio was founded in 2015 as a data lake query engine, focused on Apache Iceberg, by Tomer Shiran, its first CEO and now chief product officer, and original CTO Jacques Nadeau. The current CEO is Sendur Sellakumar, who was hired in 2023 and replaced Billy Bosworth, who took on the role in 2020. Bosworth is now a managing director at Vista Equity Partners. Nadeau left in January 2021 and is involved in a fresh startup.

It has raised $410 million in funding across five rounds, the last one bringing in $160 million in 2022 with a $2 billion valuation.

Dremio provides high-performance, Iceberg-native SQL queries into data lakes, and helped create Apache Polaris, an open Iceberg catalog implementing Iceberg’s REST API, and enabling multi-engine interoperability across a range of platforms: Doris, Dremio, Flink, Spark, Snowflake, StarRocks, and Trino. It announced its AI agent in November last year so that users could discover, analyze, and visualize their data using natural language. 

The company competes with the two giants in data lakes and AI-focused analytics, Databricks and Snowflake, as well as Starburst. Other competitors include Denodo and the three big public clouds: Azure (Synapse), AWS (Redshift, Athena, EMR), and Google (BigQuery).

SAP says that the Dremio acquisition will let SAP and non-SAP data coexist on a single open foundation, extending federated analytics across enterprise data sources while combining with SAP HANA Cloud’s in-memory engine for real-time transactions and operational performance. SAP will deliver a universal, open catalog built on Apache Polaris and the open Apache Iceberg REST Catalog API.

It will serve as both the discovery and semantic layer of SAP's Business Data Cloud, giving connected engines, whether SAP or non-SAP, a single point of access to unified business context: meaning, relationships, access rights and data lineage. This catalog will form the foundation of the SAP Knowledge Graph, embedding business relationships, organizational hierarchies, regulatory classifications and cross-system lineage as native properties.

The deal could strengthen SAP's ability to compete with Snowflake and Databricks, and work better with their compute engines.

It says it will continue Dremio's open source Apache project work with Iceberg, Polaris, and Arrow.

Prior Labs

SAP is also acquiring Prior Labs and its tabular foundation model (TFM) technology. Large language models (LLMs) are focused on text and don't operate effectively on tables, numbers, and statistics. TFMs do and, SAP says, can accurately predict business outcomes based on tabular data such as payment delays, supplier risks, upsell opportunities, customer churn risk, and more.

Germany-based Prior Labs was founded in 2024 by Frank Hutter, Noah Hollmann, and Sauraj Gambhir, and raised a €9 million ($10.5 million) pre-seed round in February last year.

SAP has its own TFM, SAP-RPT-1, and can now build on that.  SAP says Prior Labs' TabPFN-2.6 is the top-performing model on TabArena, the main benchmark for TFMs. It says TabPFN-2.6 instantly matches the accuracy of a four-hour automated machine learning pipeline, in a single model, at a fraction of the complexity.

Herzig said: "Early on, SAP recognized 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. We built SAP-RPT-1 to prove that conviction for enterprise data. 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."

By using Prior Labs' models, SAP will provide in-context learning, allowing users to provide data records to receive instant, reliable predictions without any model training. A single TFM can adapt to any business use case on the fly, resulting in faster time to value with GDPR compliance.

Once the transaction closes, SAP says it will have the opportunity to establish an industry-leading AI research lab and shape a new category in TFMs. The lab will operate as an independent unit to ensure research velocity, while SAP provides long-term investment and a direct path to productization across the SAP portfolio, with SAP AI Core and SAP Business Data Cloud, as well as the agentic layer with Joule.

The Prior Labs transaction is expected to close in Q2 or Q3 of 2026, subject to customary closing conditions, including regulatory approvals. No acquisition terms were revealed. 

Terms of the Dremio deal were also not disclosed, and it too is awaiting regulatory approval. It's expected to close in the third quarter.