Listen Now
0:00
Cohere is merging with Aleph Alpha, in a deal backed by both the Canadian and German governments and designed to give the combined firm the scale to compete for sovereign AI business.
The combined firm will keep Cohere’s name, and be headquartered in Canada. Cohere said it will also remain Canadian-owned. Schwarz Group, the major investor in Aleph Alpha, has committed US$600 million to lead the merged firm’s Series E round.
Related Articles
Both firms have secured the financial and commercial backing of governments and big businesses in their home countries. They’ve also made AI sovereignty part of their pitch, as countries look for alternatives to technology made in the U.S. and China amid geopolitical tensions.
Cohere CEO Aidan Gomez said the combined firm will give customers “uncompromising control over their AI stack” and “the absolute certainty that their data remains their own.”
Founded in September 2019, Cohere is one of a handful of firms around the world that develops its own foundational AI models. It also sells tools to businesses that let them analyze data and set up AI agents to which they can delegate workplace tasks. Aleph Alpha got out of the foundation model business in mid-2024, instead focusing on software that clients use to build chatbots and AI applications.
German newspaper Handelsblatt reported that shareholders of Cohere will get 90 per cent of the company, while Aleph Alpha shareholders will take 10 per cent.
Cohere was the larger player going into the merger. The Toronto-based firm had raised about US$1.6 billion, according to PitchBook data, including a US$600-million round closed in September 2025 that valued it at US$7 billion and was co-led by Toronto-based Radical Ventures and Montreal-based Inovia Capital. The firm reportedly reached an annual recurring revenue rate of US$240 million in 2025.
Aleph Alpha had raised about US$520 million, per PitchBook, but hasn’t announced new external financing since November 2023.
The combined firm will run some sovereign AI technology on Schwarz Group’s cloud service, Stackit.
