Cohere, a Toronto-based enterprise AI company, and Aleph Alpha, a Heidelberg-based European sovereign AI provider, have announced plans to merge and form a transatlantic AI powerhouse focused on delivering sovereign, enterprise-grade AI to governments and regulated industries. As part of the announcement, the companies of Schwarz Group, the international retail conglomerate behind Lidl and Kaufland, have committed $600 million (€500 million) in structured financing as lead investor in Cohere’s upcoming Series E funding round, which is already attracting additional interest from institutional investors. The merger is subject to approval by Aleph Alpha shareholders and competent authorities.
The combined entity will be anchored in Germany and Canada and is designed to give organizations across the public sector, finance, defense, energy, manufacturing, telecommunications, and healthcare industries a credible alternative to the concentrated landscape of US-based AI providers. Both companies were founded in 2019 and have built deep institutional relationships with governments and regulated enterprises in their respective home markets. Cohere brings global AI scale and a platform built for deployment across clouds, private environments, and on-premises infrastructure, while Aleph Alpha contributes specialized large language model research, sovereign AI expertise, and long-standing customer relationships with European public sector and enterprise clients. The combined entity will deploy its sovereign offering on STACKIT, the cloud infrastructure operated by Schwarz Digits, the IT and digital division of Schwarz Group.
The deal is framed against a backdrop of growing demand for AI sovereignty. The global market for AI services is projected to surpass $1 trillion annually, with sovereign AI needs representing nearly $600 billion of that total, according to McKinsey. Cohere has previously raised approximately $1.6 billion from investors including Nvidia, AMD Ventures, Salesforce Ventures, Oracle, Cisco, Radical Ventures, Inovia Capital, PSP Investments, and AI pioneers including Geoffrey Hinton, Fei-Fei Li, Pieter Abbeel, and Raquel Urtasun. Aleph Alpha employs approximately 200 people across four locations in Germany.
KEY QUOTES:
“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. Organizations globally are demanding uncompromising control over their AI stack. This transatlantic partnership unlocks the massive scale, robust infrastructure, and world-class R&D talent required to meet that demand. Built on the bedrock of shared Canadian and German values — where privacy, security, and responsible innovation are paramount — we are uniquely positioned to be the world’s trusted AI partner. Together, we will give enterprises and governments across Canada, Europe, and the world the technology to move from exploration to rapid, secure implementation, with the absolute certainty that their data remains their own.”
Aidan Gomez, Co-Founder and CEO, Cohere
“Aleph Alpha is in a unique position in Europe. We develop specialized large language models for Europe without compromising on sovereignty, transparency and regulatory compliance. By living this responsibility, we serve as a trusted and strategic partner to public sector and enterprise customers in Europe. Together with Cohere, we 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.”
Ilhan Scheer, Co-CEO, Aleph Alpha
“With this investment, the companies of Schwarz Group position themselves as lead investors for digital sovereignty and infrastructure. Building this infrastructure is a strategic necessity to help shape the AI revolution based on values such as trust, fairness, and responsibility. The establishment of STACKIT, Schwarz Digits’ sovereign cloud infrastructure, as the technical backbone of this transatlantic AI initiative empowers organizations to strengthen their digital independence and maintain control over their data. This is true leadership in digital sovereignty.”
Rolf Schumann and Christian Müller, Co-CEOs, Schwarz Digits
