BERLIN, April 24 (Reuters) - Artificial intelligence companies Cohere of Canada and Aleph Alpha of Germany have agreed to merge, newspaper Handelsblatt reported on Friday. Citing government and
Canadian AI startup Cohere buys Germany's Aleph Alpha to expand in Europe
Acquisition Details and Strategic Expansion
By Supantha Mukherjee and Linda Pasquini
April 24 (Reuters) - 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.
Aleph Alpha’s Shift in Focus
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.
Statements from Leadership
"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.
Investment and Shareholding Structure
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.
Broader Push for Sovereign AI
Government Perspectives
"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.
International Alliances and European Sovereignty
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 U.S. tech companies and have been promoting home-grown AI companies as a way to "fight for sovereignty."
Funding and Valuation
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.
(Reporting by Supantha Mukherjee, Linda Pasquini, Hakan Ersen and Friederike Heine; Editing by Tom Hogue, Kirsti Knolle, Clarence Fernandez and Louise Heavens)
