SAP’s €10 Billion War Chest and Twin AI Acquisitions Signal a New Chapter

SAP secures €10B financing and acquires Dremio and Prior Labs to build proprietary AI infrastructure, reducing reliance on third-party providers.

SAP is moving decisively to reshape its future, arming itself with a €10 billion financing mandate and two bolt-on acquisitions in the artificial intelligence space. The moves, unveiled around the company’s annual general meeting, mark the software giant’s most aggressive push yet to reduce its reliance on third-party AI providers and build a proprietary data infrastructure.

A Fresh Mandate for Growth

Shareholders handed the board a powerful new tool on Tuesday, authorizing the issuance of convertible bonds, warrant-linked bonds, or profit participation rights worth up to €10 billion through May 2031. The mandate replaces a similar framework from 2021 that was nearing expiry, giving SAP the flexibility to fund research, development, and strategic acquisitions without an immediate trip to the capital markets.

The timing is no coincidence. SAP announced the planned acquisition of Dremio on May 4, a US-based data lakehouse platform that will anchor the SAP Business Data Cloud. The technology is designed to weave together SAP’s proprietary data with third-party sources, creating the foundation for so-called “agentic AI” applications. The deal, still subject to regulatory clearance, is expected to close in the third quarter of 2026.

A Billion-Euro Bet on Tabular AI

But Dremio is only half the story. In a separate transaction that flew somewhat under the radar, SAP is buying Freiburg-based startup Prior Labs. The company specializes in tabular foundation models — AI systems trained not on text or images but on the structured, row-and-column data that dominates enterprise workflows: payment histories, supply chain risks, and financial forecasts. Its flagship model, TabPFN, has already racked up over three million downloads.

SAP plans to pump more than €1 billion into Prior Labs’ AI lab over four years. The purchase price itself is in the mid-hundreds of millions of euros, with over $500 million in cash earmarked for the founders. Crucially, the lab will remain a standalone unit, preserving the entrepreneurial culture that produced the technology.

The combined effect is clear: Dremio provides the data architecture, Prior Labs supplies the AI engine. Together, they give SAP a vertically integrated stack that reduces dependence on external players like OpenAI. Both transactions are slated to close in the third quarter of 2026.

Cloud Momentum and a Leadership Transition

The strategic push comes against a backdrop of strong operational performance. CEO Christian Klein highlighted that the cloud backlog — a forward-looking indicator of future revenue — climbed to €21.9 billion, a currency-adjusted increase of 25 percent. The cloud ERP suite grew even faster, at 30 percent. Klein argued that SAP is gaining market share as customers gravitate toward integrated AI solutions.

Free cash flow, however, dipped to €3.25 billion, weighed down by a one-time legal settlement. SAP stressed the figure does not reflect any structural weakness.

On the governance front, the AGM set the stage for a leadership handover. Pekka Ala-Pietilä was re-elected and intends to stand again for the chairmanship, but René Obermann — the former Deutsche Telekom chief — was voted onto the supervisory board with over 99 percent approval. He is slated to take the chair in 2027, a move seen as reinforcing the board’s technological focus. Obermann will step down from the Airbus board of directors in due course.

A Dividend Payout and a Bruised Share Price

Shareholders also approved a dividend of €2.50 per share for fiscal 2025, a 6.4 percent increase from the prior year. The payment flows on May 8.

The stock traded ex-dividend on Wednesday, and despite the technical adjustment, the shares put on a spirited performance. The price climbed to €155.82, a gain of nearly four percent on the day. But the longer-term picture remains sobering. The stock is still down roughly 23 percent year-to-date and trades well below its 200-day moving average of €198.94. A separate data point from earlier in the session put the share price at €151.42, underscoring the volatility.

SAP remains confident in its full-year outlook but has flagged headwinds from currency effects and geopolitical uncertainty that could weigh on reported growth. Whether the twin acquisitions and the €10 billion mandate can restore investor confidence will likely become clearer once both deals are finalized — and the market gets a look at the third-quarter numbers.