Cohere and Aleph Alpha Sign Their Merger Deal: A Planned Canadian-German AI Company Pitched on 'Sovereignty'

The takeaway: Cohere, the Toronto-based AI model developer, has signed a definitive business combination agreement with Germany's Aleph Alpha, formalising a plan the two first announced in April. According to Cohere, the combined company would operate as Cohere, with plans for headquarters in Berlin and Toronto, and more than 1,000 staff. Cohere says the deal is still subject to final regulatory approvals and is expected to close later this year. SiliconANGLE says the combined company will reportedly be worth $20 billion.

What's been agreed

According to Cohere's announcement on 16 September:

• The plan is for the company to be dual-headquartered in Berlin and Toronto, and to keep Aleph Alpha's Heidelberg office as a research centre.
• Ilhan Scheer, co-CEO of Aleph Alpha, will become Cohere's chief operating officer, and Aleph Alpha co-founder Samuel Weinbach will become chief research officer. Both appointments depend on the deal closing.
• Cohere will expand its partnership with Germany's Schwarz Group to offer AI on STACKIT, Schwarz's cloud service.

Cohere describes the result as "the first transatlantic sovereign AI solution". That's the company's own claim.

What the two companies do

According to SiliconANGLE, Cohere builds AI models for businesses, including its Command series, and sells access through an API and an AI productivity service called North. Aleph Alpha develops small language models for businesses and government agencies.

The money

These figures come from press reports, not from Cohere's announcement:

• SiliconANGLE reports the combined company "will reportedly be worth $20 billion". It says Cohere was valued at $7 billion last September.
• SiliconANGLE says that when the plan was announced in April, the companies said Schwarz Group planned to provide €500 million in financing.
• SiliconANGLE also cites a Globe and Mail report that a consortium backed by the Canadian government could invest another $3 billion.

What they said

• Aidan Gomez, Cohere's co-founder and CEO: "No government or enterprise should have to choose between capable AI and control over their technology."
• Ilhan Scheer, co-CEO of Aleph Alpha, said the deal strengthens its ability to deliver on its mission: "giving organizations control over the AI they rely on."
• Vass Bednar, managing director of the Canadian Shield Institute think-tank, told CBC News: "This is arguably capacity building."

CBC reports the merger was signed hours before Canada and Germany announced funding for Yoshua Bengio's AI safety lab, which we covered this morning.

Why it matters

In our view, this is a clear sign of "sovereign AI" turning into company structure: two companies from Canada and Germany combining to compete with US and Chinese firms, with a Canadian government-backed consortium reportedly considering further investment. The things to watch are whether regulators approve the deal and whether the reported funding materialises.