Canada’s Cohere and Germany’s Aleph Alpha signed a definitive merger agreement, combining into a single business that will operate under the Cohere name with dual headquarters in Toronto and Berlin. Aleph Alpha’s Heidelberg office will focus on research under the combined company, and Aleph Alpha co-chief Ilhan Scheer becomes chief operating officer of the merged entity.
Lidl parent Schwarz Group is investing 500 million euros in the combined company as part of the deal, which was first disclosed in April 2026 at an estimated $20 billion valuation. The transaction remains subject to regulatory approval. Cohere chief executive Aidan Gomez said the merger is meant to meet demand from government and enterprise customers for AI systems that are “powerful enough to compete, but secure and governable enough to trust,” particularly customers wanting data residency and independence from US cloud providers.
Why it matters
Governments and regulated industries in Europe have been pushing for AI infrastructure they can host and control domestically rather than relying on US hyperscalers — a combined Cohere-Aleph Alpha is explicitly positioning itself to serve that “sovereign AI” demand.
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