Cohere is raising up to $7 billion in new funding, including an equity investment of up to $1.6 billion from the federal government, as the company scales up its business to challenge foreign tech giants. The round will value the Toronto-based AI developer at $35.7 billion. 

Germany’s Schwarz Group is leading the round, with new investors Bell Ventures, Bullhound Capital and the Canadian government joining returning backers Inovia Capital, Nvidia and Prosperity7 Ventures.

It marks a dramatic increase both in the amount of money Cohere is raising—its previous round raised US$600 million across two closings in 2025—and in the value of the company, which in 2025 was US$7 billion.

The federal government’s investment comes with commitments from Cohere that the company will remain incorporated and headquartered in Canada, and that it will invest at least $1.7 billion in Canadian computing infrastructure by 2030, Prime Minister Mark Carney said in an announcement in Montreal on Thursday.

Cohere plans to use the financing to develop AI models and products, secure long-term computing infrastructure and expand internationally, it said in a press release.

The company sells technology that businesses and governments can run on their own systems, letting them retain control over sensitive data. The financing follows Cohere’s agreement to combine with Germany’s Aleph Alpha, a deal designed to expand its European business and offer an alternative for customers concerned about relying on U.S. technology giants or Chinese AI developers.

This story will be updated.