Sovereign AI: Cohere and Aleph Alpha seal $20 billion merger

The tie-up between Canada's Cohere and Germany's Aleph Alpha is no longer just a project. The two enterprise AI specialists signed a definitive agreement on 16 September, after first announcing the plan on 24 April 2026, according to Le Monde Informatique. The new group will keep the Cohere name, with headquarters in Toronto and Berlin.

A valuation of around $20 billion

The project emerged in the spring as a strategic combination aimed at meeting growing demand for "sovereign" AI among companies and public administrations. The deal values the new group at approximately $20 billion. According to information released during the initial announcement, Cohere shareholders are set to hold about 90% of the new entity.

The process is not yet complete. The agreement remains subject to final regulatory approvals, with closing expected during 2026. At closing, Ilhan Scheer, currently co-head of Aleph Alpha, will become chief operating officer of Cohere, while Samuel Weinbach will take over as head of research.

A balance heavily tilted toward the Canadian side

This split raises questions about the economic balance of power between two companies presented as "counterparts." Aleph Alpha had abandoned the development of frontier models to refocus on integration software. Its co-founder left the company after handing over leadership in 2025. This imbalance explains why some observers describe the deal as a Cohere acquisition "dressed up" as a merger.

Cohere was founded in Toronto in 2019. It develops large language models and AI solutions primarily for enterprises and public administrations, emphasizing deployments within customer infrastructure, security, and data confidentiality. Aleph Alpha has positioned itself in professional and public AI use cases, gradually strengthening its focus on integration and specialized models for governments and regulated sectors.

More than 1,000 employees and a dual base

The merger will create a company with more than 1,000 employees and a dual Canadian and German base. The Heidelberg site will be retained as a research center. The stakes go beyond industrial consolidation: the partners aim to offer systems that run under the control of organizations, independent of major American platforms.

The commercial argument is no longer just model performance, but the ability to execute them under the control of the organization using them.

This sovereignty logic permeates the European industry. The same trend is pushing administrations to move away from American office suites and hosting providers to offer local alternatives, as seen in the Dutch decision to migrate to a free operating system.