Cohere Agrees to Acquire Aleph Alpha for Sovereign AI

Canadian AI startup Cohere agreed to acquire Germany's Aleph Alpha to establish a transatlantic sovereign AI alternative to the market dominance of U.S. and Chinese technology firms. The combined entity will focus on providing customized AI solutions for highly regulated sectors, including defense, healthcare, and finance, ensuring that governments and institutions maintain control over their data and AI stacks.

As part of the transaction, the Schwarz Group will lead Cohere's Series E funding round with a commitment between €500 million and $600 million. The deal utilizes the Schwarz Group's cloud service, Stackit, as the technical backbone for the venture. The merger combines Cohere's global infrastructure and scale with the research capabilities of Aleph Alpha to create a counterweight to U.S. vendors like OpenAI, Google, and Microsoft, as well as European rivals such as Mistral AI.

While the partnership is framed as a merger of equals, the transaction requires only the approval of Aleph Alpha's shareholders and competition regulators. The move comes as European entities seek greater technological independence amid geopolitical tensions and uncertainty regarding U.S. tariff policies.