By Supantha Mukherjee and Hakan Ersen
BERLIN, April 24 (Reuters) – Canadian AI startup Cohere on Friday agreed to buy German tech startup Aleph Alpha at an undisclosed price to sell more to government and business customers in the highly-regulated European markets.
“We are bringing Aleph Alpha into Cohere, and we are going to merge the two entities,” Cohere CFO Francois Chadwick told Reuters in an interview. “We are going to commit to working with European infrastructure … and maintain the sovereignty requirements that are being addressed in Europe.”
Schwarz Group, which owns retailers Lidl and Kaufland and is a major Aleph Alpha shareholder, will invest $600 million in Cohere’s upcoming funding round, the companies said.
Cohere last raised $500 million in fresh capital in August 2025, bringing its valuation to $6.8 billion at the time.
Cohere’s shareholders are set to receive around 90% of the shares in the combined company, whilst Aleph Alpha’s shareholders will receive around 10%, according to a Handelsblatt report.
The German daily first reported the news on Friday.
Aleph Alpha was initially seen as Germany’s answer to OpenAI. However, the startup has since abandoned the development of large AI language models such as ChatGPT. Instead, much like Cohere, it is focusing on specialized AI applications for businesses.
A press conference with German Digital Minister Karsten Wildberger and his Canadian counterpart Evan Solomon is scheduled for 0900 GMT on Friday, with Cohere and Aleph Alpha founders and Schwarz Group executives attending.
(Reporting by Friederike Heine, Hakan Ersen, Supantha Mukherjee, Writing by Friederike Heine and Linda Pasquini; Editing by Tom Hogue, Kirsti Knolle)
