Cohere and Germany's Aleph Alpha Sign a Definitive Merger to Build a Transatlantic Sovereign-AI Powerhouse

Canada's Cohere and Germany's Aleph Alpha signed a definitive merger agreement on Wednesday, the two artificial intelligence companies announced, completing a transatlantic combination first disclosed in April that aims to create a sovereign-AI challenger to the American frontier labs. The merged business will operate as Cohere, with dual headquarters in Toronto and Berlin, and the deal positions Germany's Schwarz Group — owner of the Lidl supermarket empire — as a central financier of Europe's enterprise AI push.

Reuters reported the signing from Berlin on Wednesday morning, making this one of the day's freshest developments in the AI industry. The companies did not disclose updated financial terms, and the transaction remains subject to regulatory approvals.

Cohere co-founder and CEO Aidan Gomez on stage at Collision 2023 in Toronto. (Photo: Piaras Ó Mídheach / Collision via Sportsfile via Wikimedia Commons, CC BY 2.0)

What the agreement settles

Wednesday's definitive agreement turns into binding form what had, until now, been an announced intention. The combined company will keep the Cohere name and maintain headquarters in both Toronto and Berlin — a deliberate nod to the political reality that enterprise and government customers on both sides of the Atlantic want an AI vendor that is not wholly answerable to a single jurisdiction. Aleph Alpha's Heidelberg office will continue as a research hub, and Aleph Alpha co-chief Ilhan Scheer will become chief operating officer of the combined entity.

The merger's shape was first reported in April, when the combination was valued at roughly $20 billion (€17.34 billion) — a figure tied to that earlier disclosure, not to today's announcement. Handelsblatt reported at the time that Cohere shareholders would hold roughly 90 percent of the combined company, with Aleph Alpha holding about 10 percent. What has changed since April is mostly about money and machinery: the financing architecture and the political backing have both grown more concrete.

The Schwarz Group engine room

The most important number in Wednesday's news may belong to neither AI company. Schwarz Group, the German retail giant behind Lidl and Kaufland, is investing €500 million in the new entity and will provide computing capacity through its cloud arm, StackIT. Schwarz is separately investing between €11 billion and €13 billion in a German data-centre campus expected to house up to 100,000 AI chips.

That matters because the merger's entire pitch is about sovereignty: AI powerful enough for governments and banks, running on infrastructure they can trust and, crucially, control. "Combining the strengths of Cohere and Aleph Alpha accelerates our global expansion and advances our mission to deliver sovereign AI to nations around the world," Gomez said in the April announcement. Cohere CEO's framing to Reuters on Wednesday was tighter: the tie-up aims to meet demand for AI "powerful enough to compete, but secure and governable enough to trust."

From the German side, the language was even more pointed. Aleph Alpha's Scheer said the two companies are "building a real counterweight for organizations that refuse to outsource control over their AI to a single provider or jurisdiction, giving European institutions and enterprises access to powerful, yet controllable AI they can truly own." Rolf Schumann and Christian Müller, co-CEOs of Schwarz Digits, said their investment positions Schwarz Group as a lead investor "for digital sovereignty and infrastructure," with StackIT serving as "the technical backbone of this transatlantic AI initiative."

Canada has its own sovereignty narrative. At an April press conference, Canada's tech minister Evan Solomon said: "The global landscape is consolidating fast and we need to make sure that the power does not remain in the hands of a few dominant players... We are all seeking strategic autonomy." Cohere CFO Francois Chadwick added that the merged company would "commit to working with European infrastructure ... and maintain the sovereignty requirements that are being addressed in Europe."

Two very different companies

Strip away the sovereignty rhetoric and the merger pairs a clear winner with a company in full reinvention. Cohere, founded in Toronto in 2019 by Aidan Gomez, Nick Frosst, and Ivan Zhang, builds the Command family of open-source AI models designed to run inside a customer's own computing environment, alongside its agentic platform North and search engine Compass. The company reported $240 million in annual recurring revenue this year and has raised roughly $1.6 billion to date. Gomez himself co-authored the 2017 paper "Attention Is All You Need" — the transformer architecture paper that underpins nearly every modern large language model — as a Google Brain intern.

Aleph Alpha, by contrast, was once touted as Germany's AI champion and then walked away from the frontier-model race entirely, refocusing on AI integration software. Reuters noted that its revenue was less than €1 million in 2023, according to its latest public accounts. Founder Jonas Andrulis relinquished the CEO role in 2025 and left the company early this year; the company cut roughly 50 jobs in early 2026. What Aleph Alpha brings is not scale but positioning: a European brand trusted by regulated institutions, a Heidelberg research team, and a decade of work on compliance-native AI.

Cohere CEO Aidan Gomez at the ALL IN conference in Montreal, September 2025. (Photo: Gabriel Hutchinson via Wikimedia Commons, CC BY-SA 4.0)

Gomez, the "cartel," and the bigger fight

The merger lands in the middle of the AI industry's defining argument of the month. On Tuesday, The Times reported that Gomez had attacked Anthropic CEO Dario Amodei's proposal for frontier labs to jointly set safety standards as "a cartel by any other name." His full quote is worth reading in full: "Using fear under the pretext of protecting the public, these oligopolies are now requesting to bend competition rules and be permitted to dictate the terms for everyone else. A wolf in sheep's clothing, a cartel by any other name."

Gomez went further: "A mechanism that slows everyone down while explicitly preserving existing commercial advantage does not make AI safer. It risks entrenching today's dominant AI companies." The context is Amodei's September 12 essay, "We Must Pace the Frontier," which asked governments for a narrow antitrust waiver so labs could coordinate on safety — an essay backed by Elon Musk, Sam Altman, and Demis Hassabis, and dismissed by President Trump as a "hoax," as we reported here.

That makes Cohere's positioning legible. The company is simultaneously signing a cross-border merger to compete with the frontier labs and leading the rhetorical charge against the safety-coordination framework those labs are building. "AI needs guardrails. That is not the dispute and never has been. The dispute is over who writes them, who gets to participate and whose interests the rules are protecting," Gomez wrote in a September 13 blog post — a line that doubles as a business strategy for a company selling sovereign, governable AI to the institutions most likely to be regulated.

What it means

Start with the competitive map. Last week, Mistral — Europe's leading model maker — raised €3 billion at a valuation above €21 billion, per Reuters. Cohere is reportedly in advanced talks to raise $2 billion to $3 billion at a $20 billion valuation as part of its Series E process, according to PYMNTS citing The Globe and Mail, with Cohere confirming "strong inbound interest." The enterprise and sovereign AI market is consolidating fast, and the definitive agreement moves the Cohere–Aleph Alpha combination from press-release ambition to an actual corporate entity — pending the regulatory approvals that any cross-border AI deal now attracts.

For American readers, the story has a direct angle: the "sovereign AI" pitch is, at its core, a pitch to governments and regulated enterprises that no longer want to run their most sensitive work on models controlled by a handful of US companies. The merged company's customers will include European institutions by design — but the same sovereignty argument is being made in Washington, Ottawa, and every capital weighing what it means to outsource national infrastructure to foreign AI providers. Whether a Toronto–Berlin company can out-execute Silicon Valley's frontier labs on enterprise trust is the open question. Wednesday's signature means it now has to answer it.

Sources: Reuters (Sept. 16, 2026 — definitive agreement; Apr. 24, 2026 — merger announcement); BusinessWire joint press release (Apr. 24, 2026); The Times (Sept. 15, 2026 — Gomez "cartel" remarks); The Wall Street Journal (Apr. 2026); TechCrunch (Apr. 25, 2026); SiliconANGLE (Apr. 24, 2026); PYMNTS/Globe and Mail (Sept. 11, 2026 — Series E talks); the-decoder (Aleph Alpha pivot reporting). All quotes verified against their original outlets. The ~$20 billion valuation figure describes the April 2026 disclosure; no updated terms were announced Wednesday.