Cohere and Aleph Alpha sign their merger: a bet on trans-Atlantic sovereign AI

When a European government purchases a language model to manage its sensitive documents, the market poses a harsh question: does it want capability or control? On 16 September 2026, the Canadian company Cohere and the German company Aleph Alpha signed a definitive merger agreement that bets the question is fundamentally wrong, and that institutions can have both if a supplier stands on both sides of the Atlantic simultaneously.

From an April framework to a binding contract

The two companies announced their intent to partner last April, and the new signing turns that intent into a definitive business merger agreement. The unified company will operate globally under the name Cohere and describes itself as the first trans-Atlantic sovereign AI solution. The agreement remains subject to final regulatory approvals and is expected to close later this year, according to Cohere’s statement.

The workforce will rise to more than a thousand employees across the two continents, with main sites in Berlin and Toronto, while Aleph Alpha’s office in Heidelberg becomes a research centre. At the leadership level, Ilhan Shir, co-CEO of Aleph Alpha, will become chief operating officer of Cohere, and Samuel Feinbach, a co-founder of the German firm, will take the role of chief research officer. Both appointments are conditional on the deal’s completion.

Twenty billion on paper

The two companies have not disclosed the deal’s value officially. However, SiliconANGLE reported estimates that value the new entity at roughly $20 billion, compared with a $7 billion valuation for Cohere in September. The site notes that Cohere’s revenue was $240 million last year, according to CNBC, and that Aleph Alpha has raised about $126 million in venture funding since its founding. The gap between revenue and valuation suggests investors are buying a concept before buying numbers, and the concept here is called sovereignty.

The report adds that the German retail group Schaeffler announced in April its intent to contribute €500 million, about $573 million, and that the Globe and Mail reported a Canadian-government-backed alliance could inject another $3 billion. The latter figure remains a press report not confirmed by the company in its statement.

Sovereignty is built through alliance

The unified company commits to operate within the legal frameworks of both Canada and Germany, including rules on sensitive and technical data protection, with regulatory safeguards that enhance operational control and accountability. Cohere says it will expand its partnership with Schaeffler Group companies to deliver sovereign AI on the STACKIT platform, the sovereign cloud service of Schaeffler Digits.

Ayden Gomez, co-founder and CEO of Cohere, said: “No government or institution should be forced to choose between capable AI and control over its technology.” Christian Müller, CEO of Schaeffler Digits, summed up the philosophy in a striking sentence: “Digital sovereignty does not mean going it alone; it means aggregating power strategically.”

That sentence is the story’s core. Europe and Canada do not each possess the computing scale and capital of the major U.S. labs, so they chose to combine what they have: German research in specialized models, Canadian commercial reach, and a locally owned European cloud. Shir said Aleph Alpha has focused over the past twelve months on specialized language models for governments and regulated sectors, and Cohere gives that work global distribution.

What does that mean for the Gulf?

Saudi Arabia and the United Arab Emirates are running the same race with different tools, through national firms such as Huumain and G42 and massive data-center investments. The European-Canadian lesson poses a practical question to Gulf decision-makers: is sovereignty built by owning every layer of technology, or by alliances that ensure compliance with local law and operational control?

Cohere is not far from the region; in August it posted a job ad for a government-affairs lead based in the UAE or Saudi Arabia, indicating interest in Gulf public-sector contracts. With “sovereignty” becoming a clause in government tender documents, a Gulf buyer will face a new supplier marketing itself as an alternative to both U.S. and Chinese labs.

Conclusion

The deal has not yet closed, the circulating valuation has not been issued by the companies, and regulatory approvals remain pending. Yet the direction is clear: digital sovereignty has become a marketable product, and mid-size nations are learning that accessing it comes more through partnerships than through isolation. Anyone watching from Riyadh or Abu Dhabi now has a third model worth studying.