Canadian AI firm Cohere is set to acquire Germany’s Aleph Alpha, backed by Schwarz Group, Lidl’s parent company. Supported by their respective governments, the partnership aims to offer an alternative to the U.S.-dominated AI market. Cohere, valued at $6.8 billion, will lead the merged entity, pending required approvals.
Schwarz Group, a key Aleph Alpha shareholder, supports the acquisition with €500 million in structured financing and plans to leverage its IT division’s STACKIT cloud service. Schwarz also leads Cohere’s Series E funding round, valuing the new entity at approximately $20 billion, as reported by Handelsblatt.
Cohere’s revenue was $240 million in 2025, while Aleph Alpha faced fiscal challenges, but investors are optimistic about their combined potential. The collaboration aligns with Elon Musk’s xAI interest in a similar venture with France’s Mistral AI.
Cohere targets sectors like defense, energy, finance, healthcare, manufacturing, telecommunications, and the public sector, aiming to offer privacy and independence-focused AI solutions. Aleph Alpha’s expertise in specialized European language models enhances this initiative.
Cohere CEO Aidan Gomez noted the complementary nature of both companies’ language model focus. The announcement event featured significant figures from both firms and government representatives, highlighting international cooperation.
Given tensions with the U.S., Canada and Germany recently established a Sovereign Technology Alliance to strengthen sovereign AI capabilities. Cohere plans to become a Canadian-German entity, but a potential IPO may complicate ownership clarity.