Canadian AI company Cohere and Heidelberg-based Aleph Alpha announced on April 24, 2026 that they planned to combine, with Aleph Alpha brought into Cohere. Cohere leads the combined group, which keeps the Cohere name. The plan needed approval from shareholders and from the relevant authorities.
The companies did not disclose financial terms. German media reported that Cohere shareholders would hold about 90% of the combined company and Aleph Alpha shareholders about 10%, and Handelsblatt reported that the term sheet valued the new entity at around $20 billion. The governments of Germany and Canada endorsed the deal.
Schwarz Group, the owner of Lidl and a major Aleph Alpha shareholder, said its companies would lead Cohere's next funding round, a Series E, with €500 million (about $600 million) in structured financing. The two companies signed a definitive combination agreement on September 16, 2026, with closing expected later in the year.
What Aleph Alpha built
Aleph Alpha was founded in Heidelberg in 2019 by Jonas Andrulis and was one of the few European startups building its own large language models. In September 2024 it moved away from that race toward PhariaAI, a platform that lets organisations run third-party models alongside its own. Andrulis argued at the time that a purely European model was no longer a viable business.
The company sells to European enterprises and public bodies, and holds contracts with Germany's digital ministry and the state government of Baden-Württemberg, according to The Decoder. TechCrunch reported that it had about 250 employees and had generated little revenue and significant losses.
“Cohere will become a Canadian-German company.”
Leadership changes before the deal
The combination followed turnover at the top. Reto Spoerri, formerly head of Lidl's online business, joined as co-CEO in August 2025. In October 2025 Andrulis gave up the chief executive role, and chief growth officer Ilhan Scheer became the second co-CEO. About 50 jobs were cut in early 2026, and Andrulis later announced a new AI startup with the consulting firm Roland Berger.
Under the definitive agreement signed in September, Scheer was named Cohere's chief operating officer, Aleph Alpha's Samuel Weinbach became chief research officer, and the Heidelberg office stays open as a research centre.
Why Cohere is buying
Cohere, founded in Toronto in 2019, builds AI models for businesses. It reported $240 million in annual recurring revenue in 2025 and was valued at $6.8 billion in an August 2025 round, according to TechCrunch; other outlets put that valuation at about $7 billion. Chief executive Aidan Gomez said Aleph Alpha's work on small language models, European languages and tokenizers complemented Cohere's own.
The combined company is pitched as a sovereign alternative to US AI labs for governments and regulated industries, including the public sector, finance, defence, energy, telecommunications and healthcare. Cohere chief financial officer Francois Chadwick told Tech.eu that the company would commit to working with European infrastructure.
The companies pointed to a McKinsey estimate from March 2026 that the global market for AI services will pass $1 trillion a year, with nearly $600 billion of that tied to sovereign AI. Canada and Germany had recently set up a Sovereign Technology Alliance to build sovereign AI capacity and reduce dependence on foreign technology, TechCrunch reported.
The funding and the Schwarz connection
Aleph Alpha raised more than $500 million in a Series B announced in November 2023, led by Innovation Park Artificial Intelligence (Ipai), Bosch Ventures and Schwarz Group companies. SAP, Hewlett Packard Enterprise, Christ&Company Consulting and Burda Principal Investments joined as new investors. The Decoder reported that the round included research, business and licensing commitments as well as equity.
Schwarz Group holds about 20% of Aleph Alpha through its IT arm Schwarz Digits, according to The Decoder. The combined company's systems will run on STACKIT, the cloud platform operated by Schwarz Digits, which the companies called the technical backbone of the project. TechCrunch questioned whether European customers would see a Canada-linked company as sovereign enough, and whether a future listing could move ownership to shareholders with no tie to either country.
