Canadian AI company Cohere is planning to take over Germany-based Aleph Alpha, with support from both governments. The goal is to create a strong “sovereign AI” option — meaning businesses and governments can keep full control over their data instead of relying on big U.S. tech companies like Microsoft or Google.
Both Cohere and Aleph Alpha are known names in their home countries, but globally they are still far behind major players. This deal is not equal — Cohere, valued earlier at $6.8 billion, will lead the combined company once approvals are complete.
A major part of this deal is backed by Schwarz Group. They are already an investor in Aleph Alpha and are putting in about €500 million more. In return, the new company will use Schwarz Group’s cloud platform, STACKIT, which helps the retail giant grow its tech business.
Cohere is also raising new funding (Series E), with Schwarz Group as the lead investor. The combined company is expected to be valued around $20 billion — a big jump considering their current revenue levels. Cohere made about $240 million in 2025, while Aleph Alpha has struggled with low revenue and losses.
So why merge? The simple answer: survival and growth. By joining forces, they improve their chances against much bigger competitors.
There’s also a bigger trend here. AI companies are starting to team up instead of competing alone. For example, xAI has explored partnerships with Mistral AI and others. But partnerships with U.S. companies can raise concerns for European firms trying to stay independent.
The new Cohere-Aleph Alpha company will focus on industries that need strict data control — like defense, healthcare, finance, energy, and government sectors.
Aleph Alpha brings valuable strengths, especially in smaller models, European languages, and specialized tools like its PhariaAI system. Even though the company recently faced leadership changes and strategic shifts, its team and expertise still add strong value.
At a larger level, this move also reflects growing cooperation between Canada and Germany. Both countries want to reduce dependence on foreign tech and build their own secure systems.
Still, one big question remains: Will European organizations see this as truly “sovereign” if Canada is involved? And if the company goes public in the future, global investors might influence its direction.
For now, the plan is clear — build a powerful Canadian-German AI company that can compete on a global level while keeping control closer to home.
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