By Supantha Mukherjee and Hakan Ersen
April 24 (Reuters) – Canadian AI startup Cohere agreed on Friday to buy German tech startup Aleph Alpha at an undisclosed price as it looks to boost sales to government and business customers in highly regulated European markets.
Initially seen as Germany’s answer to OpenAI, Aleph Alpha has since abandoned development of large AI language models such as ChatGPT to focus on specialised AI applications for businesses, similar to Cohere.
“We are bringing Aleph Alpha into Cohere, and we are going to merge the two,” 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, an investor in Aleph Alpha, will also invest $600 million in Cohere’s upcoming funding round. The German group, which owns the retailers Lidl and Kaufland, also offers cloud services.
Chadwick said Cohere was looking to close the funding round in the next few months, but declined to give further details.
Cohere last raised $500 million in fresh capital in August 2025, taking its valuation to $6.8 billion then.
Its shareholders are set to receive about 90% of the shares in the combined company, whilst Aleph Alpha’s shareholders will receive about 10%, said the German daily Handelsblatt, which first reported the news on Friday.
A press conference with German Digital Minister Karsten Wildberger and his Canadian counterpart Evan Solomon is set for 0900 GMT on Friday, with Cohere and Aleph Alpha founders and Schwarz Group executives in attendance.
The deal positions Cohere and Aleph Alpha to deliver a secure alternative for customised AI in highly-regulated sectors ranging from energy and defence to finance, telecoms and healthcare as well as the public sector, the companies said.
(Reporting by Friederike Heine, Hakan Ersen and Supantha Mukherjee; Writing by Friederike Heine and Linda Pasquini; Editing by Tom Hogue, Kirsti Knolle and Clarence Fernandez)
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