Cohere said it plans to acquire Aleph Alpha as part of a push to expand its presence in Europe. The proposed deal, which has not yet closed and remains subject to regulatory approval, will also bring new funding. Schwarz Group, a key backer of Aleph Alpha, intends to invest $600 million into Cohere’s upcoming Series E round. The company expects to complete that funding round in 2026, according to a source familiar with the matter.
Cohere, founded in 2019, has raised about $1.6 billion to date from investors including Nvidia and AMD, and was valued at $7 billion in 2025. The acquisition would strengthen its ability to deliver customized AI systems tailored for regulated sectors such as government, finance, defense, and healthcare. Aleph Alpha brings established relationships with German public sector clients, including work with federal and regional authorities, which could accelerate Cohere’s entry into Europe’s largest economy.
The deal also reflects a strategic shift toward so-called sovereign AI, where organizations retain greater control over data, infrastructure, and deployment. Aleph Alpha, founded in 2019, initially focused on building large language models before pivoting to enterprise applications. It has raised more than $600 million in funding, including grants, and built a presence in Europe’s public sector. Cohere said combining capabilities would enhance its ability to meet demand for secure and compliant AI systems.
Strategic Implications
The planned acquisition highlights growing demand for AI solutions that meet strict regulatory and data sovereignty requirements. Governments and enterprises are increasingly seeking alternatives to global cloud providers that allow greater control over sensitive data. By integrating Aleph Alpha’s regional expertise, Cohere could position itself as a provider of localized AI infrastructure tailored to European standards.
The additional $600 million investment from Schwarz Group also signals continued investor confidence in enterprise-focused AI companies. Access to capital will be critical as firms compete to build infrastructure, scale operations, and meet rising demand for customized AI deployments. For customers, the deal could expand access to AI systems designed specifically for compliance-heavy industries.
European Market Dynamics
Europe has become a focal point for AI development shaped by regulation, including strict data protection and emerging AI governance frameworks. This environment has encouraged the growth of providers that emphasize transparency, security, and local control. Aleph Alpha’s existing contracts with German government entities highlight the importance of trusted domestic partnerships in this market.
For Cohere, the acquisition offers a faster route into Europe compared with building operations from scratch. It also positions the company against both U.S. and regional competitors seeking to capture enterprise AI demand. As governments and corporations prioritize sovereignty and compliance, partnerships like this may become more common, reshaping how AI services are delivered across regions.