What was signed
Cohere and Aleph Alpha have signed a definitive business combination agreement, the two companies said in a joint release on Wednesday, five months after they first announced plans to join forces. The combined business will operate globally under the Cohere name. The transaction still needs final regulatory approval and is expected to close later this year.
According to the release, the company plans to have two headquarters, in Berlin and Toronto, and to keep Aleph Alpha’s Heidelberg office as a research centre. The deal would take Cohere’s headcount to more than 1,000 people across the two continents. BetaKit reported that Cohere’s chief executive, Aidan Gomez, announced the agreement on stage at the ALL IN conference in Montréal.
Who runs what
Two Aleph Alpha executives will join Cohere’s leadership once the deal closes. Ilhan Scheer, Aleph Alpha’s co-CEO, becomes chief operating officer, in charge of the company’s global operating model. Samuel Weinbach, an Aleph Alpha co-founder, becomes chief research officer. Both appointments depend on the transaction being completed.
“No government or enterprise should have to choose between capable AI and control over their technology,” Gomez said in the release.
A merger, or a purchase?
The companies have described the deal publicly as a merger. BetaKit, however, reported that a source familiar with the deal told it in April that Cohere, as the larger company, is in effect buying Aleph Alpha. BetaKit also cited a Financial Times report from April that valued the joint entity at around US$20bn. Neither company has published a valuation or the financial terms.
When the plan was first announced on 24 April, the companies of Schwarz Group committed €500m (about US$600m) in structured financing and said they intended to lead Cohere’s upcoming Series E round, according to Schwarz Digits, the group’s technology arm. Aivio reported earlier this month that Cohere was in advanced talks to raise up to $3bn at a $20bn valuation, with two governments in the round.
The sovereignty pitch
Both companies sell to governments and regulated industries that want to keep control of the models and data they rely on. The release says the combined company will operate within the legal frameworks of both Canada and Germany, and that its structure includes safeguards and oversight mechanisms, which it did not describe in detail.
The company will also extend its partnership with Schwarz Group to deliver sovereign AI on STACKIT, the cloud service run by Schwarz Digits. “Digital sovereignty is not about going it alone, but about strategically joining forces,” said Christian Müller, chief executive of Schwarz Digits.
What to watch
The release says further integration and product details will follow. The next step is regulatory clearance. The companies have not said which authorities are reviewing the deal, and have given no closing date beyond “later this year”.
