Canadian AI start-up Cohere has agreed to take over Germany's Aleph Alpha in a deal valuing the combined group at about 20 billion dollars, creating what the two governments frame as a transatlantic alternative to US Big Tech providers. The transaction is backed by the German and Canadian governments and focused on "sovereign" AI — systems where customers keep control of their data and infrastructure. Aleph Alpha shareholders will receive one Cohere share for every nine shares held, according to two sources familiar with the terms; Cohere will retain its name and operate from dual headquarters in Canada and Germany.
The deal reflects a broader pushback against reliance on Silicon Valley: it follows SpaceX's acquisition of coding start-up Cursor and is an early sign of consolidation in the AI sector. Cohere was founded in 2019 in Toronto by former Google researchers, focuses on enterprise large language models deployed within clients' own infrastructure, and was valued at 6.8 billion dollars last year. Heidelberg-based Aleph Alpha was valued at roughly 500 million euros in a 2023 round and has struggled to keep up with larger rivals; its former CEO Jonas Andrulis stepped down earlier this year to found a new AI start-up with consultancy Roland Berger.
The merger comes with a fresh funding round led by Schwarz Digits, the tech arm of German retailer Schwarz Group (owner of Lidl supermarkets), which has committed 600 million dollars in equity and research funding. Schwarz is already the biggest backer of Aleph Alpha (above 20% stake) and is building an 11 billion-euro data centre near Berlin to support AI workloads; those data centres will host Cohere's AI systems. The German government will act as anchor customer for sovereign, secure AI in public procurement. Canada's AI minister Evan Solomon told the FT that "middle powers" need "an option between the hyperscalers and the hegemon". Source: Financial Times, 24 April 2026, Florian Müller, George Hammond and Ilya Gridneff.