Canadian AI company Cohere has agreed to acquire German AI firm Aleph Alpha. The deal values the combined company at around $20 billion. Financial terms of the acquisition have not been disclosed, and the deal remains subject to regulatory approval.
Cohere will retain its name and operate with dual headquarters in Canada and Germany. Aleph Alpha shareholders will receive one Cohere share for every nine shares held, according to sources familiar with the terms.
The deal focuses on so-called sovereign AI: systems that allow governments and businesses to keep control over their own data and infrastructure, rather than relying on large US technology companies such as OpenAI or Google.
Germany’s digital ministry called the tie-up of “high geostrategic and economic value.” The German government is expected to become an anchor customer for the combined company. Aleph Alpha already works with Germany’s ministry for digital affairs and the Baden-Württemberg regional government.
Retail giant Schwarz Group, which owns supermarket chain Lidl, will lead a new funding round and has committed $600 million, including equity and research funding. Its technology arm, Schwarz Digits, is expected to provide data centre infrastructure for the combined company.
Cohere was founded in Toronto in 2019 by former Google researchers and was valued at around $6.8 billion in a recent funding round. Aleph Alpha, based in Heidelberg, was founded the same year and raised more than $600 million in investor and grant funding.
Sources: CNBC, Financial Times
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