Cohere and Aleph Alpha signed a definitive merger agreement, formalizing a partnership first sketched in April and creating a company valued at roughly $20B.
Once regulators sign off, the pair will trade as one company under the Cohere banner. Day-to-day leadership stays split across two head offices, one in Toronto and one in Berlin, while the existing Aleph Alpha site in Heidelberg is kept on as a research center. Ilhan Scheer, who has jointly run Aleph Alpha, takes over as chief operating officer.
The money behind the tie-up is European and industrial. Schwarz Group, the German retail group that owns Lidl and cloud unit STACKIT, is putting in €500M. The retailer separately plans to spend between €11B and €13B on a German data center campus meant to hold up to 100,000 AI chips, with compute served through STACKIT.
The two companies arrived from opposite directions. Cohere, founded in 2019, has raised about $1.6B from backers including Nvidia and AMD and reached a $7B valuation in 2025. It sells models that run inside customer environments and reported $240M in recurring revenue last year. Aleph Alpha once chased frontier models, then pivoted to integration work and government contracts, with less than €1M in 2023 revenue.
CEO Aidan Gomez framed the deal as demand for AI “powerful enough to compete, but secure and governable enough to trust.” The pitch is a European-controlled stack of models, software and compute at a moment when Mistral’s €3B round showed investors will fund that story.
Regulators still have to clear the transaction, and the companies did not disclose revised financial terms.
