SAP Buys Dremio and Prior Labs to Build AI Data Platform

Key Takeaways

• SAP is acquiring Dremio to combine SAP and non-SAP data using the open Apache Iceberg format
• Prior Labs will receive €1 billion over four years to develop tabular foundation models
• The acquisitions follow SAP's earlier purchase of data management firm Reltio and a partnership with Databricks

The Dremio Deal: Open Data Lakehouse Meets Enterprise ERP

SAP is buying Dremio, an open data lakehouse provider, to expand its Business Data Cloud platform. The acquisition will let SAP customers combine data from SAP systems with data from other sources using Apache Iceberg, an open table format that has become the de facto standard for modern data lakes.

SAP CTO Philipp Herzig framed the move as a solution to a common enterprise problem: fragmented data sitting in disconnected systems.

“The move will help customers go from fragmented data to AI-ready intelligence on an open platform.”

— Philipp Herzig, SAP CTO

Dremio's technology sits in the data lakehouse category, which combines the low-cost storage of data lakes with the performance and governance features of traditional data warehouses. Its support for Apache Iceberg is significant. Iceberg allows different tools to read and write the same data without vendor lock-in, a selling point for enterprises wary of being trapped in proprietary formats.

Prior Labs: A €1 Billion Bet on Tabular AI

The Prior Labs deal is different. SAP is investing €1 billion over four years in the AI startup, which focuses on tabular foundation models. These are AI systems designed to work with structured data, the spreadsheets, databases, and tables that form the backbone of enterprise operations.

Prior Labs called the deal the start of a new phase, describing its ambition to become "the next frontier AI lab." That is a bold claim, putting the startup in the same sentence as labs like OpenAI, Anthropic, and DeepMind. Whether it can deliver remains to be seen.

The focus on tabular data is notable. Most AI attention has gone to large language models that work with text, images, and code. But enterprise data is mostly structured: sales figures, inventory levels, financial records, customer databases. Making that data more useful to AI systems is a different problem than training a chatbot.

SAP's AI Catch-Up Strategy

These acquisitions fit a pattern. SAP has been on a buying spree to close its AI gap. Earlier this year, the company acquired Reltio, a data management specialist. In early 2025, SAP announced a strategic partnership with Databricks, another major player in the data lakehouse space.

The strategy is clear: SAP wants to own the data layer that feeds enterprise AI applications. If companies are going to run AI on their business data, SAP wants that data flowing through SAP systems.

The Dremio acquisition complements rather than replaces the Databricks partnership. Databricks focuses on data engineering and analytics workloads. Dremio's strength is its query engine and its support for open formats. Together, they give SAP more options for connecting different data sources.

What This Means for SAP Customers

For companies already running SAP, the acquisitions promise easier access to their data for AI applications. The Apache Iceberg approach means data does not have to be copied or moved between systems. It can stay where it is and still be used by AI tools.

The tabular foundation models from Prior Labs could eventually make it easier to build AI applications that understand business data without extensive custom training. But that technology is still early. The €1 billion investment is spread over four years, which suggests SAP is thinking long-term.

Frequently Asked Questions

What is Dremio and why did SAP buy it?

Dremio is an open data lakehouse provider that lets organizations query data across different sources without moving it. SAP acquired Dremio to expand its Business Data Cloud platform and support the Apache Iceberg open table format.

What are tabular foundation models?

Tabular foundation models are AI systems designed to work with structured data like spreadsheets and databases. Unlike language models that process text, these models aim to make enterprise data more useful for AI applications.

How much is SAP investing in Prior Labs?

SAP is investing €1 billion in Prior Labs over four years to develop tabular foundation models for enterprise applications.

What is Apache Iceberg?

Apache Iceberg is an open table format for large data sets. It allows different tools and platforms to read and write the same data without vendor lock-in, making it popular for modern data lake architectures.

Source: The Decoder / Maximilian Schreiner