The Canadian AI provider Cohere and the Heidelberg-based company Aleph Alpha signed a binding merger agreement on September 16, 2026. The new company will operate worldwide under the name Cohere, with headquarters in Toronto and Berlin. Heidelberg will remain as a research center, with more than 1,000 employees working for the joint company in the future.
Cohere takes operational lead, Heidelberg remains research
Initial discussions about a merger had already been confirmed by Cohere and Aleph Alpha in April 2026, with backing from the federal government. The agreement of September 16 turns this into a binding contract. Ilhan Scheer, previously co-CEO of Aleph Alpha, will take on the role of Chief Operating Officer at Cohere; co-founder Samuel Weinbach will become Chief Research Officer.
According to Aleph Alpha, it brings around 200 employees from four German locations as well as expertise in small language models, European languages, and access to European authorities. Press reports such as SiliconANGLE estimate the combined company at around 20 billion dollars; this figure has not been independently verified, and both companies do not provide official valuation figures. A rumored share distribution of about ninety to ten percent in favor of Cohere remains unconfirmed. According to the agreement, the merged company will employ more than 1,000 people on both continents, with additional locations in London, Paris, Seoul, New York, and Montreal.
Wildberger speaks of a champion, critics doubt the label
Federal Digital Minister Karsten Wildberger (CDU) and his Canadian counterpart Evan Solomon jointly presented the deal to the press. Wildberger described the merged company, according to heise online, as a global AI champion and spoke of an alternative “made in Germany, made in Canada.” Solomon emphasized that both countries wanted to jointly access markets where their values were shared.
Observers counter that a company predominantly controlled by Canadians is hard to serve as evidence of European AI sovereignty as long as Cohere holds the larger share. The deal thus fits into an older debate about Germany’s AI lag: too much hope placed on individual national champions while simultaneously facing chronically tight growth capital. The concrete infrastructure commitment appears more viable: The Schwarz Group, known through Lidl and Kaufland, is providing around 500 million euros through its digital subsidiary Schwarz Digits and is integrating its cloud platform Stackit as the technical backbone for the joint AI provision. Schwarz Digits is pursuing its own goals: reduced dependence on Chinese and US hyperscalers as well as domain-specific models for the German industry. Previously, the group had pursued billion-euro data center plans, including a project in Lübbenau worth eleven billion euros.
Antitrust authorities in three countries still need to approve
The merger has not yet been completed. It requires approval from the competition authorities in all affected jurisdictions: the German Federal Cartel Office, the Canadian Competition Bureau, and possibly the Directorate-General for Competition of the EU Commission. Although both companies are currently below the revenue threshold of 500 million euros, above which an EU-wide review is automatically triggered, the Commission recently signaled that it would scrutinize mergers in the AI sector more closely. Cohere and Aleph Alpha expect to complete the transaction in the second half of 2026, although neither company specifies an exact date.
It remains open whether German authorities will additionally subject the transaction to an investment review under the Foreign Trade Act, as is possible for critical technologies; no corresponding announcement has been made so far. Both companies have also not yet commented specifically on job cuts or increases at the Heidelberg location, aside from the general commitment to further personnel growth for Aleph Alpha. Until the legally binding completion, Cohere and Aleph Alpha will continue to operate as separate companies and will appear on the market separately.
It will be crucial whether the new company, under Canadian majority control, will still be considered a European or German solution in future tenders from the federal and state governments – the answer will determine whether authorities and regulated industries continue to procure it as an alternative to US providers. It also remains unclear how many of the approximately 200 jobs in Heidelberg will survive the merger in the long term, once research and product development are increasingly managed from Toronto. The next concrete date is the expected transaction completion in the second half of 2026, subject to the pending antitrust approvals.
