Cohere and Aleph Alpha agree to merge

Cohere and Aleph Alpha signed a definitive agreement to merge, formalising a combination the two Canadian and German firms had first outlined as a framework in April 2026. The companies described the result as the first “transatlantic sovereign AI” provider, aimed at governments and regulated industries that want frontier-scale models without depending on a US or Chinese vendor.

Under the terms, Cohere’s shareholders will hold about 90% of the combined company and Aleph Alpha’s shareholders about 10%, at a deal reportedly valuing the merged entity at roughly $20bn — a figure given in trade press coverage rather than the companies’ own statement. The combined firm will be dual-headquartered in Toronto and Berlin, keep a research base in Heidelberg, and employ more than 1,000 people across both continents. Cohere co-founder and chief executive Aidan Gomez framed the move as building an alternative to the dominant American and Chinese frontier labs.

Germany’s Schwarz Group — the retail conglomerate behind Lidl and Kaufland, and an existing Aleph Alpha backer since 2023 — is separately committing around $600 million to a forthcoming Cohere Series E, and the merged company said it would deliver sovereign AI services through Schwarz Digits’ STACKIT cloud. The deal was announced at the ALL IN 2026 conference in Montreal and remains subject to regulatory approval, with the companies expecting to close later in 2026.

The merger consolidates two of Europe and Canada’s best-funded non-US, non-Chinese model developers into a single entity at a moment when governments in both regions have pushed “sovereign AI” — domestically controlled compute and models — as a policy priority. Whether the combined company can compete on model capability with OpenAI, Anthropic, Google DeepMind or China’s frontier labs, rather than on data-residency and procurement grounds alone, remains untested.