Cohere's Aidan Gomez bets the house on 'sovereign AI' with Aleph Alpha merger valuing the group at $20bn
The Toronto lab founded by three former Google researchers has agreed to absorb Germany's Aleph Alpha, a deal backed by Berlin and Ottawa that aims to build a transatlantic counterweight to the American AI giants.
Cohere has agreed to merge with German rival Aleph Alpha in a deal that values the combined business at roughly $20bn, a striking jump for a company worth $7bn as recently as last September. Germany's Schwarz Group, the retail conglomerate behind Lidl and a key backer of Aleph Alpha, is committing $600m to Cohere's coming Series E, expected to close this year. Cohere shareholders will hold around 90 per cent of the enlarged group, with Aleph Alpha investors taking the rest.
The company keeps the Cohere name, a global headquarters in Toronto and a European base in Berlin, and will remain Canadian-owned. Chief executive Aidan Gomez, who founded Cohere in 2019 alongside Ivan Zhang and Nick Frosst, framed the tie-up as a bet on data sovereignty. He said the deal would help "deliver sovereign AI to nations around the world" and give customers "uncompromising control over their AI stack". Speaking from Berlin, Gomez argued that organisations increasingly demand certainty that their data remains their own.
The logic is as much political as commercial. Aleph Alpha, founded by former Apple researcher Jonas Andrulis, abandoned frontier model development in 2024 and refocused on enterprise software, leaving it in a weakened position but with deep European public-sector relationships and a customer base spanning SAP, Bosch, Infineon and Deutsche Bank. That regulated-sector pitch lands as enterprises wrestle with the sprawl of unmanaged "shadow AI" inside their own walls. Gomez described that European focus on smaller language models and tokenisers as complementary to Cohere's own work on large models. Schwarz Digits is expected to provide the infrastructure hosting the combined firm's systems.
The merger reshapes Europe's AI pecking order, pushing the combined entity past France's Mistral, valued at $13.7bn, as the region's most valuable lab. Cohere has leaned hard into enterprise and government work rather than consumer chatbots, crossing $240m in annualised recurring revenue earlier this year and selling its agentic AI platform North into Oracle, SAP, RBC and Bell. The raise also rides a wider AI infrastructure boom lifting valuations across the sector. Joelle Pineau, formerly head of Meta's fundamental AI research, joined last year as chief AI officer.
On a stock market listing, Gomez stayed coy. He has long maintained that Cohere wins on efficiency rather than spending, telling reporters: "We're never going to spend the most money. That's not how we compete." A public offering, he added, was always under consideration, though the firm was not rushing to be first. OpenAI has already filed to go public, raising the stakes for every frontier lab weighing a listing.