❯ Cohere and Aleph Alpha sign merger agreement, creating a roughly $20 billion bet on sovereign enterprise AI

Transatlantic mergerCanada’s Cohere and Germany’s Aleph Alpha have signed a definitive agreement. The combined company will keep the Cohere name, with dual headquarters in Toronto and Berlin, and Aleph Alpha co-CEO Ilhan Scheer becoming chief operating officer. The companies were valued at about $20 billion when talks emerged in April; updated terms were not disclosed and regulatory approval is still required.

German capitalLidl owner Schwarz Group will invest €500 million in the new company and plans to provide as much as €13 billion of compute through StackIT. Cohere reported about $240 million in annual recurring revenue last year and sells Command models designed for customer-controlled environments. Aleph Alpha has shifted from frontier-model development toward government and enterprise integration, combining models, deployment software and European compute under one roof.

What customers buyThe companies are targeting governments and businesses that demand data residency, regulatory control and on-premise deployment, not consumer chatbots. Aleph Alpha’s German channels plus Cohere’s models could shorten the procurement chain, but the merger must absorb product overlap and sharply different revenue bases. European enterprise buyers will test whether model performance earns the premium attached to local compliance.

▪ SIGNALSovereign AI is turning from policy language into merger logic: compute, models and local delivery must fit inside the same contract.