Cohere and Aleph Alpha sign merger agreement to form transatlantic sovereign AI company
Key Points
- Cohere and Aleph Alpha signed a definitive merger agreement on September 16, moving from April's planned partnership to a signed deal awaiting regulatory approval.
- Schwarz Group is investing €500 million in the combined company and up to €13 billion in compute through STACKIT.
- Aleph Alpha's Ilhan Scheer becomes Cohere COO and Samuel Weinbach becomes Chief Research Officer once the deal closes, expected later this year.
Cohere and Aleph Alpha signed a definitive business combination agreement on September 16, 2026, moving forward with the merger the two companies first disclosed in April. The combined business will operate globally under the Cohere name, with dual headquarters in Toronto and Berlin, and Aleph Alpha's Heidelberg office continuing as a research center. The transaction is subject to regulatory approvals and is expected to close later this year.
What materially changed since the April announcement
In April, Cohere and Aleph Alpha disclosed a planned partnership valued at roughly $20 billion at the time. That has now moved to a signed definitive agreement, with confirmed leadership appointments taking effect once the deal closes. Aleph Alpha Co-CEO Ilhan Scheer will become Chief Operating Officer of Cohere, and Aleph Alpha co-founder Samuel Weinbach will become Chief Research Officer. Neither company disclosed updated financial terms for the merger itself. Retail group Schwarz Group, which committed $600 million (€500 million) in structured Series E financing when the partnership was first announced in April, is investing €500 million in the combined company and has said it will invest up to €13 billion in compute capacity through its cloud arm, STACKIT.
Essential context: sovereign AI and the two companies' paths
Cohere builds Command, a family of models designed to run inside a customer's own computing environment, and has focused on enterprise and government customers rather than consumers. It reported $240 million in annual recurring revenue last year. Aleph Alpha, once positioned as Germany's national AI champion, stepped back from building frontier models and shifted toward AI integration software; its 2023 public accounts showed revenue under 1 million euros, and co-founder Jonas Andrulis left the company this year after giving up the CEO role in 2025. The merger also comes as European AI investment accelerates: Mistral raised €3 billion at a valuation above €21 billion the week before this announcement. Enterprises evaluating similar control-over-data requirements have other options emerging too, including Cloudera and Mistral's partnership to run AI models directly on enterprise data, announced earlier this month.
Why the merger matters for enterprise AI buyers
The combined company is positioning itself as an alternative for governments and regulated enterprises that want AI systems operating within their own infrastructure and under their own jurisdiction's rules, rather than depending on a single vendor or cloud stack. Cohere CEO Aidan Gomez said the goal is AI that is "powerful enough to compete, but secure and governable enough to trust." The deal expands the combined entity's reach across the public sector, finance, defense, energy, manufacturing, telecommunications, and healthcare, sectors where data residency and control requirements have shaped vendor selection. Schwarz Group's continued financial backing and infrastructure commitment through STACKIT gives the merged company a compute base tied specifically to European sovereignty requirements.
What happens next
The transaction still requires regulatory approval in the relevant jurisdictions before it can close. Cohere and Aleph Alpha said the deal is expected to close later this year, after which the leadership appointments for Ilhan Scheer and Samuel Weinbach take effect and further integration and product details will follow.