Dive Brief:
- SAP is aiming to address AI data challenges with the acquisitions of data lakehouse platform Dremio and AI model maker Prior Labs, according to two Monday announcements.
- The Dremio platform will complement SAP Business Data Cloud and SAP HANA Cloud offerings, combining SAP’s data with non-SAP data to run AI workloads more effectively in real time, according to the announcement. The acquisition is expected to close in Q3 2026 pending regulatory approval. Terms of the deal were not disclosed.
- SAP also acquired Prior Labs, which specializes in tabular foundation models designed for structured data. The company committed to $1.17 billion over the next four years to help scale the AI startup, and it will continue to operate as an independent entity.
Dive Insight:
Data is proving to be a critical component to scaling AI agents across the enterprise, leading companies like SAP to invest in the data layer.
“Enterprise AI doesn’t stall because the models aren’t good enough; it stalls because the data isn’t ready for AI agents,” SAP CTO Philipp Herzig said in the Dremio acquisition announcement.
Data infrastructure issues lead to $108 billion in wasted AI spend every year, according to a Hitachi Vantara analysis. However, IT leaders expect AI spending will continue to rise by as much as 76% in the next two years despite data challenges. Amer Sports, which launched its RISE with SAP journey last year, pointed to modernizing data as an important part of the company’s digital transformation to support advanced forecasting and inventory management.
SAP’s Dremio and Prior Labs acquisitions mark the company’s latest steps toward building a data foundation to support enterprise AI deployments. In March, SAP announced its intentions to acquire Reltio, a master data management software provider, to propel SAP Business Data Cloud into an enterprise data platform that can support agentic AI at scale. The deal is expected to close later this year.
SAP launched SAP Business Data Cloud last year to allow customers to build an end-to-end data platform supporting high-value AI use cases, SAP CEO Christian Klein said during the company’s Q1 2026 earnings call in April.
At SAP Sapphire 2026 next week, Klein said SAP plans to announce fundamental changes to the company’s portfolio, including how the company plans to govern the agentic AI layer for customers and infuse domain knowledge into SAP AI agents.
“Agents often don’t have, yet, the full understanding of business data and processes to deliver highly accurate outcomes,” Klein said during the earnings call. “This is needed to deploy — at scale and with high accuracy — agentic AI use cases in the most mission-critical parts of our customers’ business.”
SAP is also investing in model diversification with its acquisition of Prior Labs. The AI startup’s tabular foundation models are pre-trained on synthetic or structured business data, a weakness for large language models, the company said.
“Unlike LLMs, TFMs are purpose-built for this type of data and can accurately predict business outcomes based on tabular data such as payment delays, supplier risks, upsell opportunities, customer churn risk and more,” according to the announcement.
