Cohere and Aleph Alpha have signed a definitive merger agreement to form a new entity valued at approximately $20 billion. The combined company will retain the Cohere name and maintain dual headquarters in Toronto and Berlin, while the Heidelberg office will serve as a research hub.
Ilhan Scheer, co-chief of Aleph Alpha, will join the leadership team as chief operating officer. The merger follows a partnership announcement made in April. The transaction is currently awaiting regulatory approval, with no changes to the financial terms disclosed.
Schwarz Group, the owner of Lidl and StackIT, is investing €500 million into the merged business. The conglomerate also plans to spend between €11 billion and €13 billion on a German data-center campus, which is expected to house up to 100 000 AI chips to provide compute capacity.
Cohere, founded in 2019, previously raised $1.6 billion and reached a $7 billion valuation in 2025. The company reported $240 million in annual recurring revenue last year. Aleph Alpha, also founded in 2019, has raised over $600 million and reported less than €1 million in revenue in 2023.
