Canadian AI startup Cohere has agreed to take over Germany’s Aleph Alpha in a deal valuing the combined group at around $20bn, banking on both country’s desire for “sovereign” AI systems independent of the US.
The tie-up, which has been endorsed by both German and Canadian governments, will create a transatlantic player focused on helping enterprise and public sector clients tighten control over their data and infrastructure, marking a direct challenge to US hyperscalers such as OpenAI and Google.
Cohere, which will retain its name and operate dual headquarters in Canada and Germany, has increasingly leaned into private deployments of large language models (LLMs).
Former model-maker turned AI consultancy Aleph Alpha, meanwhile, has built strong relationships with German industry and government, though it has struggled to scale at the pace of global rivals. Sifted previously reported how Aleph Alpha was undergoing a strategic revamp following the departure of CEO and cofounder Jonas Andrulis.
The deal will be accompanied by a fresh funding round led by Schwarz Digits, which has committed $600m across equity and research funding. Its parent, Schwarz Group — owner of Lidl — is betting heavily on data centre infrastructure to support AI workloads in Germany.
For governments, the merger underscores a growing desire to reduce reliance on US tech giants amid mounting geopolitical tensions. Berlin is expected to act as an anchor customer, prioritising domestically controlled AI systems in public procurement.
