Cohere and Aleph Alpha Merge to Form Enterprise AI Giant with Dual Headquarters
Canadian AI firm Cohere and German company Aleph Alpha have signed a definitive merger agreement to create a combined entity operating as Cohere. Backed by a €500 million investment from Schwarz Group, the new company will maintain dual headquarters in Toronto and Berlin, aiming to provide secure, governable AI systems for enterprise clients.
Cohere, a Canadian artificial intelligence company, and Aleph Alpha, a German firm, have signed a definitive merger agreement on Wednesday. The combined business will operate under the name Cohere, establishing dual headquarters in Toronto and Berlin.
The merger aims to target the enterprise AI market by providing systems that are both powerful and secure. Cohere CEO Aidan Gomez stated that the tie-up is designed to meet demand for AI that is "powerful enough to compete but secure and governable enough to trust." Under the new structure, Aleph Alpha’s office in Heidelberg will focus on research.
Ilhan Scheer, co-chief of Aleph Alpha, will become the chief operating officer of Cohere. This leadership change follows earlier developments at Aleph Alpha, where co-founder Jonas Andrulis left the company this year after relinquishing the chief executive role in 2025. Prior to the merger, Aleph Alpha had stepped back from developing frontier AI models to refocus on AI integration software.
Schwarz Group, the owner of Lidl, is investing €500 million (US$572 million) in the new entity. Additionally, Schwarz Group will provide computing capacity through its cloud arm, StackIT. The group is also investing between €11 billion and €13 billion in a German data-centre campus expected to house up to 100,000 AI chips.
The transaction remains subject to regulatory approvals, and updated financial terms were not disclosed. The merger was first disclosed in April with an estimated valuation of about US$20 billion at that time.
In terms of financial performance, Cohere reported US$240 million in annual recurring revenue last year. In contrast, Aleph Alpha reported revenue of less than €1 million (US$1.15 million) in 2023. Cohere develops Command, a family of open-source AI models designed to run inside a customer’s own computing environment.