Cohere to merge with Aleph Alpha, forming $20B AI company

Cohere, the Canada-based enterprise AI unicorn, announced Friday that it would merge with Germany-based enterprise AI company Aleph Alpha. The deal has yet to close.

The Financial Times reported the newly formed company will be valued at $20 billion. Separately, CNBC reported that Schwarz Group, one of Aleph Alpha’s top backers, will also invest $600 million in Cohere’s Series E funding round, which is expected to close later this year.

The merger comes as a handful of Silicon Valley players continue to dominate the commercial AI landscape — a market that is busy with consolidation activity.

A press release announcing the Cohere-Aleph Alpha union said one goal of the merger is to give businesses and governments an alternative to those dominant tech players, one that offers greater independence and control over their data. The companies also hope to combine their talent pools across Canada and Germany to create what the release called a “transatlantic AI powerhouse.”

Why it matters

The tie-up signals a push toward a non-US enterprise AI alternative, positioning Cohere and Aleph Alpha to compete with Silicon Valley incumbents for governments and businesses seeking data independence.