Canadian firm Cohere and German firm Aleph Alpha have entered into a definitive merger agreement to create a larger AI firm that offers increased data and technology control to businesses, governments and other organisations.
The merged company will maintain its name Cohere, and have dual headquarters in Toronto and Berlin. Aleph Alpha’s Heidelberg office will continue to focus on research, while its co-chief Ilhan Scheer will become chief operating officer of Cohere.
There’s a demand for AI systems that can operate in a customer’s infrastructure and meet regulatory requirements in the country,” the companies said. The merged company will focus on delivering AI that is both strong and secure, and easy to manage for customers, according to Cohere’s CEO Aidan Gomez.
The combined company, estimated to have a value of approximately $20 billion, was first announced in April. The companies said they didn’t provide new financial terms and the deal still needs regulatory approvals.
Lidl’s owner, Germany’s Schwarz Group will put in €500m. Schwarz will also offer computing power via its cloud business StackIT. The group plans to invest €11 billion to €13 billion in a data-centre campus in Germany which will be able to host up to 100,000 AI chips.
Cohere builds the Command line of open-source AI models that are deployed in customers’ own computing environments. It’s mainly around businesses and governments/public administrations, not consumer AI products.
Aleph Alpha has been moving away from frontier AI models and is now more focused on AI integration software. It co-founder Jonas Andrulis has stepped down from the company earlier this year after serving as the chief executive until 2025.
Cohere has an ARR of $240 million. In its most recent public accounts, released in 2023, Aleph Alpha had revenue of less than €1 million.
The deal coincides with European AI firms gaining greater funding. French AI firm Mistral raised over €3 billion last week at a more than €21 billion valuation.
Source: Reuters
