Cohere Acquires Aleph Alpha to Create Trans-Atlantic Sovereign AI Champion

Canadian artificial intelligence startup Cohere announced on Friday it will acquire German AI company Aleph Alpha, creating a combined entity aimed at offering "sovereign AI" services to governments and regulated industries seeking alternatives to dominant American and Chinese technology providers. The deal was unveiled at a press conference in Berlin attended by German Federal Minister for Digital Affairs Karsten Wildberger and Canadian Minister of Artificial Intelligence and Digital Innovation Evan Solomon, who traveled to Berlin specifically for the occasion. The Schwarz Group, a major shareholder in Aleph Alpha, committed to investing 585 million dollars in Cohere's next financing round and will provide cloud infrastructure for the combined company. The Financial Times, citing sources close to the companies, estimated the valuation of the merged entity at 20 billion dollars, though neither the ministers nor the company executives disclosed financial terms at the press conference. The combined company will retain the Cohere name, with Cohere holding 90 percent of the merged entity, according to Handelsblatt.

Berlin press conference signals political weight behind deal Wildberger framed the announcement as a turning point for Germany's technological future, calling it a "pioneering moment for our country's technological future." Cohere chief executive Aidan Gomez, who co-founded the company, was present at the Berlin press conference alongside representatives of the Schwarz Group. Gomez emphasized that organizations should retain control over their own AI infrastructure, a central argument for the sovereign AI model the combined company intends to pursue. Evan Solomon, who has served as Canada's minister of artificial intelligence and digital innovation since May 2025, described the Canadian-German alliance as "just the beginning," with further steps to follow. „The global landscape is consolidating rapidly and we must ensure that power is not concentrated in the hands of a few dominant actors” — Evan Solomon via France 24 Francois Chadwick, Cohere's chief financial officer, told Reuters that the company would commit to using European infrastructure and complying with sovereignty requirements applicable in Europe. Germany will become the second global headquarters of the combined group, according to the announcement.

Schwarz Group's €11 billion data center anchors the infrastructure plan The Schwarz Group's financial and infrastructure role is central to the deal's structure. The conglomerate is currently building a new data center in Lübbenau, Brandenburg, at a cost of 11 billion euros, which will serve as sovereign cloud infrastructure for the combined Cohere entity. The 585 million dollar commitment from Schwarz will be structured as both an investment and research-and-development funding, according to the Wall Street Journal. $6.8B (USD) — Cohere's valuation in its last funding round Cohere had previously raised 500 million dollars in fresh capital last summer at a valuation of 6.8 billion dollars, meaning the projected 20 billion dollar valuation of the merged entity would represent a substantial step up. Aleph Alpha, which was once described as the German answer to OpenAI, had pivoted in 2024 away from building large-scale AI language models and shifted focus to tailored enterprise solutions, a direction already shared by Cohere. A spokesman for Aleph Alpha said the company has since resumed development of a larger model for business-to-business use cases, drawing on data from clients.

Key milestones in the Cohere-Aleph Alpha deal: — ; — ; — ; —

Aleph Alpha was founded in Heidelberg and was long promoted by the German government as Europe's answer to Silicon Valley in the field of AI. The company initially attempted to compete directly with OpenAI by building large-scale language models and chatbots before encountering difficulties breaking into the market at scale, leading to its 2024 strategic pivot. Cohere, founded in 2019, has focused on selling configurable AI software to enterprise customers and counts Nvidia among its partners. The broader push for European AI sovereignty has gained momentum as the European Union announced plans to promote the construction of several so-called AI gigafactories across the continent, with one planned for Germany.

Critics question whether state-backed merger solves structural problems The deal drew skepticism from commentators who questioned whether a politically driven merger could address Europe's deeper structural disadvantages in AI. The Frankfurter Allgemeine Zeitung argued that Cohere and Aleph Alpha remain small compared to heavyweights such as OpenAI or Anthropic even in combination, and suggested that Aleph Alpha's attractiveness to Cohere stemmed primarily from the implicit promise of German state contracts rather than technological parity. The newspaper noted that the German government could have purchased Cohere's AI offerings without requiring a merger at all. Critics argued that what Europe needs are better framework conditions — a stronger single market, improved access to growth capital, and more flexible regulation — none of which the merger directly addresses. Cohere's stated aim is to expand its business with European governments, state institutions, and companies from regulated industries, using Aleph Alpha's existing sales contacts and relationships on the continent as a market entry point. The Frankfurter Allgemeine warned that the federal government risks prematurely selecting a winner in the competition for trustworthy AI rather than allowing market forces to determine outcomes. Cohere valuation before and after merger: Cohere standalone valuation (summer 2025) (before: $6.8 billion, after: ); Estimated combined entity valuation (April 2026) (before: , after: $20 billion (per Financial Times))