Synopsis
Canadian AI company Cohere is acquiring German tech startup Aleph Alpha. This move aims to expand Cohere's reach in regulated European markets. Investor Schwarz Group will also inject $600 million into Cohere's upcoming funding round. The partnership seeks to offer secure, customized AI solutions across various industries. This collaboration signifies a push for European technological sovereignty.Listen to this article in summarized format
Canadian AI firm Cohere agreed on Friday to buy German tech startup Aleph Alpha at an undisclosed price as it looks to increase sales to government and business customers in highly regulated European markets.
Initially seen as Germany's answer to OpenAI, Aleph Alpha has since abandoned development of large AI language models such as ChatGPT to focus on specialised AI applications for businesses, similar to Cohere.
"This merger enables us to grow faster. And to ensure that the market has access to more secure and sovereign technology," Cohere CEO Aidan Gomez told journalists in Berlin.
Schwarz Group, an investor in Aleph Alpha, will also invest $600 million in Cohere's upcoming funding round. The German group, which owns the retailers Lidl and Kaufland, also offers cloud services.
Cohere shareholders are set to receive about 90% of the shares in the combined company, whilst Aleph Alpha's shareholders will receive about 10%, said German daily Handelsblatt, which first reported the news on Friday.
Just the beginning
The transaction, through which the companies aim to deliver a secure alternative for customised AI solutions across sectors ranging from energy and defence to finance, telecoms, healthcare and the public sector, is just the beginning of a broader push for sovereign AI, Canada's Digital Minister, Evan Solomon, told reporters.
His German counterpart, Karsten Wildberger, said Germany was open to further alliances, after the two countries struck a Sovereign Technology Alliance earlier this year.
"I believe what is being documented today is this: we also need a different path for ourselves, a path different from that of the U.S., through partnerships," he said. "Naturally there's also enormous interest from our European partners."
European leaders have been increasingly wary of the continent's dependency on a handful of US tech companies and have been promoting home-grown AI companies as a way to "fight for sovereignty."
Cohere was looking to close the funding round in the next few months, Cohere CFO Francois Chadwick told Reuters in an interview, declining to give further details.
Cohere last raised $500 million in fresh capital in August 2025, taking its valuation to $6.8 billion then.
