Cohere, a Toronto-based enterprise AI company, has announced a merger with the Heidelberg-based German startup Aleph Alpha. While framed as a merger, the deal is effectively an acquisition, with Cohere shareholders receiving approximately 90% of the combined entity and Aleph Alpha shareholders receiving approximately 10%.
The acquisition is intended to increase sales to government and business customers in highly regulated European markets. By joining forces, the companies aim to tap into growing demand for AI technology that is not dependent on U.S. tech giants, appealing to customers uneasy about the dominance of American firms in the artificial intelligence field.
As part of the agreement, the Schwarz Group, a key backer of Aleph Alpha, plans to invest $600 million in Cohere's upcoming Series E round. Additionally, the German government is set to become an anchor customer. The announcement was made in Berlin and attended by both digital ministers.