Canada’s Cohere and Germany’s Aleph Alpha have signed a definitive agreement to merge. The AI companies aim to strengthen their position with governments and organizations in regulated sectors. The combined entity will have headquarters in Toronto and Berlin.
The agreement follows the announcement of the proposed merger in April. The transaction is still subject to regulatory approval and is expected to close later this year. The combined company will operate globally under the name Cohere and will have more than 1,000 employees.
The companies themselves are not disclosing any details regarding the financial terms of the merger. However, according to reports cited by SiliconANGLE, the combined company is expected to be valued at approximately $20 billion. Cohere was valued at $7 billion during a funding round last September.
When the merger plans were announced in April, it was also reported that the German Schwarz Group intended to invest 500 million euros in the combined entity. In addition, according to the Canadian newspaper The Globe and Mail, a consortium backed by the Canadian government could invest up to 3 billion dollars.
Focus on sovereign AI
Both companies explicitly target organizations that want to maintain control over their data and AI infrastructure. These include governments and companies in highly regulated sectors. Cohere and Aleph Alpha are presenting the merger as a transatlantic alternative in the field of sovereign AI.
Operations will remain split between Canada and Germany. In addition to the two headquarters, Aleph Alpha’s current office in Heidelberg will continue to operate as a research center. This means Aleph Alpha will retain an important research function in Germany even after the merger.
According to the companies, the legal and organizational structure must take into account the requirements regarding data protection and digital sovereignty in both countries. They say they will establish safeguards and oversight mechanisms for this purpose. Details on exactly how this structure will function have not yet been disclosed.
Aleph Alpha’s management team moves forward
Two members of Aleph Alpha’s executive board will also assume key positions within the new Cohere. Co-CEO Ilhan Scheer will become Chief Operating Officer. He will be responsible for global operations and scaling up the organization.
Samuel Weinbach, co-founder and Co-Chief Research Officer of Aleph Alpha, will become Chief Research Officer at Cohere. His research focuses on areas such as tokenization, training language models, explainability, and image generation.
According to Scheer, Aleph Alpha has focused more strongly over the past year on specialized language models for governments and regulated sectors. He says Cohere adds to this a broader international reach and more opportunities for rolling out AI systems.
Collaboration with Schwarz Digits
The merger also continues the collaboration with Schwarz Group. Cohere plans to offer its AI technology through STACKIT, Schwarz Digits’ cloud service. In doing so, the companies are targeting European customers who want to host their AI systems and data within a European infrastructure.
Schwarz Group also has big plans for the infrastructure on which such applications can run. According to SiliconANGLE, the group announced last year that it intends to invest 11 billion euros in a new data center that will eventually accommodate up to 100,000 GPUs.
Digital sovereignty is a key part of the new Cohere’s positioning. CEO Aidan Gomez states that organizations should not have to choose between powerful AI models and control over their technology. He believes that the merger with Aleph Alpha will bring together the research expertise, infrastructure, and capabilities needed to roll out AI across organizations.
Once the transaction is approved, more details are expected to follow regarding the integration of both companies and their products.