Cohere and Aleph Alpha Seal Trans-Atlantic A.I. Merger
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Canada and the European Union have been growing closer politically for some time, and the A.I. industry seems to be following suit: Several months ago, Canadian A.I. company Cohere and Germany’s Aleph Alpha announced plans to join forces. Now the two companies have made it official, signing a definitive merger agreement, as Reuters reported and both companies have confirmed. The deal still requires regulatory approval and is expected to close later this year.
The combined company will operate under the Cohere name and positions itself as the first trans-Atlantic provider of sovereign A.I. Its target customers are governments, public agencies and heavily regulated industries that want to run A.I. systems within their own infrastructure while complying with local rules.
Two Headquarters, Research in Heidelberg
The merged company will have headquarters in Toronto and Berlin, while Aleph Alpha’s current base in Heidelberg will remain a research hub. The transaction will grow Cohere’s workforce to more than 1,000 employees on both sides of the Atlantic. Aleph Alpha currently employs around 200 people at four locations in Germany.
When the plans first became public in April, the combination was valued at around $20 billion (about €17.3 billion). The companies did not disclose updated financial terms.
New Roles for Aleph Alpha’s Leadership
Once the deal closes, Cohere will expand its leadership team. Ilhan Scheer, currently co-CEO of Aleph Alpha, will become chief operating officer, overseeing global operations and the company’s organizational growth. Scheer previously founded the data analytics company fable+, which was acquired by Accenture.
“Over the past twelve months, we have sharpened our focus on specialized language models for government agencies and regulated industries,” Scheer said. “Cohere brings global reach and experience in deploying A.I. securely. Together, we can bring what we have built to more organizations around the world.”
Samuel Weinbach, Aleph Alpha’s co-founder and currently co-chief research officer, will become Cohere’s chief research officer and lead research from Heidelberg. His work focuses on areas including tokenization, language model training and explainability.
Aleph Alpha was once hailed as Germany’s great hope in the race to build large A.I. models, but it stepped back from developing frontier models and shifted its focus to A.I. integration software. Co-founder Jonas Andrulis gave up the CEO role in 2025 and left the company earlier this year.
In technological terms, neither company competes at the very top. The A.I. models from Cohere and Aleph Alpha lag well behind those of market leaders such as OpenAI, Google and Anthropic in performance. This is especially true for Aleph Alpha, whose in-house language models had already fallen behind the leading pack before its change in strategy. Instead of chasing peak performance, both companies therefore emphasize data protection, control and the ability to run within customers’ own infrastructure.
Schwarz Group as a Deep-Pocketed Partner
The Schwarz Group, which owns the retail chains Lidl and Kaufland, plays a central role in the deal. According to Reuters, it is investing €500 million in the new company. The partnership with its IT division, Schwarz Digits, is also being expanded: The A.I. solutions are to be offered via STACKIT, the group’s sovereign cloud. The Schwarz Group is investing between €11 billion and €13 billion in a data center campus in Germany designed to house up to 100,000 A.I. chips.
“Digital sovereignty does not mean going it alone, but strategically pooling forces,” said Christian Müller, CEO of Schwarz Digits. The goal, he said, is to establish STACKIT as the technical backbone for sovereign A.I. solutions.
Unequal Partners
Financially, the two companies are far apart in size. Cohere reported annual recurring revenue (ARR) of $240 million for last year. Aleph Alpha, according to its most recent public accounts, reported revenue of less than €1 million for 2023.
Founded in 2019, Cohere has raised about $1.6 billion from investors including Nvidia, AMD Ventures, Salesforce Ventures, Oracle and Cisco. The company develops the Command family of models, which can run directly in customers’ IT environments, from the cloud to fully air-gapped systems.
“No country and no company should have to choose between powerful A.I. and control over its own technology,” said Aidan Gomez, Cohere’s co-founder and CEO. Together, he said, the companies aim to meet rising demand for A.I. that is “powerful enough to compete, but secure and governable enough to trust.”
Momentum in Europe’s A.I. Market
The deal comes as European A.I. companies are drawing fresh capital. French model developer Mistral raised €3 billion at a valuation of more than €21 billion just last week. With the new Cohere, another major player emerges that puts digital sovereignty at the heart of its offering.
