Why Cohere is merging with Aleph Alpha

Cohere is acquiring Germany-based Aleph Alpha with backing from Schwarz Group (Lidl's parent), positioning the merged entity as a sovereign European alternative to US-dominated AI companies. Schwarz Group is investing €500 million (~$600M) in structured financing and anchoring the Series E valuation at approximately $20 billion, a significant jump from Cohere's previous $6.8 billion. The deal combines Cohere's $240M ARR with Aleph Alpha's technology to create a competitive European LLM player using STACKIT sovereign cloud infrastructure.