Cohere takes over Aleph Alpha shortly after the German startup ousted its original founder
Key Points
Canadian AI company Cohere is acquiring Heidelberg-based startup Aleph Alpha, with the combined company valued at around $20 billion.
The Schwarz Group is investing $600 million and providing the cloud infrastructure. The focus is on "sovereign AI" for governments and regulated industries that want to keep full control over their data.
The merger has political backing from both Germany and Canada. Aleph Alpha had already pulled out of the race to build large language models and parted ways with founder Jonas Andrulis.
Just months after founder Jonas Andrulis had to give up the CEO role, Canadian AI company Cohere is taking over Aleph Alpha - once hailed as Germany's answer to OpenAI. The Schwarz Group is putting $600 million into the deal.
Canadian AI company Cohere has agreed to acquire Aleph Alpha in a deal that values the combined company at roughly $20 billion. Cohere, the larger of the two, keeps its name and will run with dual headquarters in Canada and Germany. Neither company said whether the Aleph Alpha brand will survive in any form. The deal still needs approval from Aleph Alpha shareholders and regulators.
According to CNBC, Aleph Alpha shareholders will get one Cohere share for every nine shares they hold. The Schwarz Group, the parent of Lidl and owner of more than 20 percent of Aleph Alpha, is leading a $600 million funding round. Schwarz Digits' cloud platform STACKIT will host Cohere's AI systems.
The deal centers on "sovereign AI" - systems where customers keep control over their own data and infrastructure. Both companies sell to enterprise and government clients in regulated industries like finance, defense, and healthcare. Aleph Alpha brings existing contracts with Germany's digital ministry and the state government of Baden-Württemberg, which a source familiar with the plans called a major draw for Cohere.
Berlin and Ottawa throw political weight behind the deal
Cohere takes over Aleph Alpha shortly after the German startup ousted its original founder
Key Points
Canadian AI company Cohere is acquiring Heidelberg-based startup Aleph Alpha, with the combined company valued at around $20 billion.
The Schwarz Group is investing $600 million and providing the cloud infrastructure. The focus is on "sovereign AI" for governments and regulated industries that want to keep full control over their data.
The merger has political backing from both Germany and Canada. Aleph Alpha had already pulled out of the race to build large language models and parted ways with founder Jonas Andrulis.
Just months after founder Jonas Andrulis had to give up the CEO role, Canadian AI company Cohere is taking over Aleph Alpha - once hailed as Germany's answer to OpenAI. The Schwarz Group is putting $600 million into the deal.
Both governments are backing the acquisition. Canadian AI minister Evan Solomon told the FT the merger was "super mutually beneficial," saying the goal was to make sure governments and businesses have an option between the hyperscalers and the hegemon.
Germany's digital ministry called the deal one of high geostrategic and economic value. Berlin plans to act as an anchor customer and give sovereign AI solutions priority in public procurement.
From Germany's AI darling to acquisition target
Cohere was founded in 2019 in Toronto by a group of AI researchers including former Google Brain researcher Aidan Gomez. The company has raised around $1.6 billion and was valued at just under $7 billion in 2025.
Aleph Alpha, also founded in 2019 in Heidelberg, pulled in over $500 million in a Series B round in late 2023 from the Schwarz Group, Bosch Ventures, SAP, and HPE. That round wasn't all equity, though - it also included research, business, and licensing commitments. While French rival Mistral hit a valuation of nearly 12 billion euros around the same time, Aleph Alpha's valuation stalled.
In September 2024, the company changed course. Rather than keep burning money in the race for ever-larger language models, Aleph Alpha repositioned itself around its PhariaAI platform as an "operating system for generative AI" that could plug in third-party models. Founder Jonas Andrulis argued at the time that building a purely European LLM was no longer a viable business model.
Meanwhile, the Schwarz Group (Lidl, Kaufland), which already held around 20 percent through Schwarz Digits, was gaining more and more say over strategy and personnel. In August 2025, Reto Spoerri, formerly head of Lidl's online business, joined as co-CEO alongside Andrulis. By October 2025, Andrulis had to give up the CEO role entirely and was offered a seat on the advisory board. Ilhan Scheer, previously chief growth officer and an Accenture alumnus, was named the second co-CEO.
In early 2026, Aleph Alpha cut around 50 jobs, and Andrulis told the NZZ he had left for good: "I'm out." The NZZ reported he had been pushed out, though Andrulis declined to comment on the new management or the Schwarz Group's influence. Shortly after, he announced a new AI startup with consulting firm Roland Berger.
A Canadian takeover puts Europe's AI dependency in plain sight
For years, German media cast Aleph Alpha as Europe's answer to OpenAI, but the company never lived up to the hype. Part of the problem goes back to early calls for European alternatives to GPT-3 that fell on deaf ears in 2019. The EU and the German government didn't act until years later, and by then OpenAI, Google, and Anthropic had already divided up the market.
Germany and the EU are still paying for that slow response. A Canadian company now buying Germany's once most prominent AI hope makes that dependency harder to ignore than any strategy paper ever could.
Canadian AI company Cohere has agreed to acquire Aleph Alpha in a deal that values the combined company at roughly $20 billion. Cohere, the larger of the two, keeps its name and will run with dual headquarters in Canada and Germany. Neither company said whether the Aleph Alpha brand will survive in any form. The deal still needs approval from Aleph Alpha shareholders and regulators.
According to CNBC, Aleph Alpha shareholders will get one Cohere share for every nine shares they hold. The Schwarz Group, the parent of Lidl and owner of more than 20 percent of Aleph Alpha, is leading a $600 million funding round. Schwarz Digits' cloud platform STACKIT will host Cohere's AI systems.
The deal centers on "sovereign AI" - systems where customers keep control over their own data and infrastructure. Both companies sell to enterprise and government clients in regulated industries like finance, defense, and healthcare. Aleph Alpha brings existing contracts with Germany's digital ministry and the state government of Baden-Württemberg, which a source familiar with the plans called a major draw for Cohere.
Berlin and Ottawa throw political weight behind the deal
Both governments are backing the acquisition. Canadian AI minister Evan Solomon told the FT the merger was "super mutually beneficial," saying the goal was to make sure governments and businesses have an option between the hyperscalers and the hegemon.
Germany's digital ministry called the deal one of high geostrategic and economic value. Berlin plans to act as an anchor customer and give sovereign AI solutions priority in public procurement.
From Germany's AI darling to acquisition target
Cohere was founded in 2019 in Toronto by a group of AI researchers including former Google Brain researcher Aidan Gomez. The company has raised around $1.6 billion and was valued at just under $7 billion in 2025.
Aleph Alpha, also founded in 2019 in Heidelberg, pulled in over $500 million in a Series B round in late 2023 from the Schwarz Group, Bosch Ventures, SAP, and HPE. That round wasn't all equity, though - it also included research, business, and licensing commitments. While French rival Mistral hit a valuation of nearly 12 billion euros around the same time, Aleph Alpha's valuation stalled.
In September 2024, the company changed course. Rather than keep burning money in the race for ever-larger language models, Aleph Alpha repositioned itself around its PhariaAI platform as an "operating system for generative AI" that could plug in third-party models. Founder Jonas Andrulis argued at the time that building a purely European LLM was no longer a viable business model.
Meanwhile, the Schwarz Group (Lidl, Kaufland), which already held around 20 percent through Schwarz Digits, was gaining more and more say over strategy and personnel. In August 2025, Reto Spoerri, formerly head of Lidl's online business, joined as co-CEO alongside Andrulis. By October 2025, Andrulis had to give up the CEO role entirely and was offered a seat on the advisory board. Ilhan Scheer, previously chief growth officer and an Accenture alumnus, was named the second co-CEO.
In early 2026, Aleph Alpha cut around 50 jobs, and Andrulis told the NZZ he had left for good: "I'm out." The NZZ reported he had been pushed out, though Andrulis declined to comment on the new management or the Schwarz Group's influence. Shortly after, he announced a new AI startup with consulting firm Roland Berger.
A Canadian takeover puts Europe's AI dependency in plain sight
For years, German media cast Aleph Alpha as Europe's answer to OpenAI, but the company never lived up to the hype. Part of the problem goes back to early calls for European alternatives to GPT-3 that fell on deaf ears in 2019. The EU and the German government didn't act until years later, and by then OpenAI, Google, and Anthropic had already divided up the market.
Germany and the EU are still paying for that slow response. A Canadian company now buying Germany's once most prominent AI hope makes that dependency harder to ignore than any strategy paper ever could.