Cohere agrees to acquire Aleph Alpha in a $20bn AI deal

In short: Canadian AI company Cohere has agreed to acquire Germany’s Aleph Alpha in a deal that values the combined business at about $20bn.

What happened

Cohere, a Canadian start-up, has agreed to take over Aleph Alpha, a German start-up, according to the Financial Times. The deal is supported by the German and Canadian governments.

The combined company will keep the Cohere name and have two headquarters, one in Canada and one in Germany. People familiar with the terms said Aleph Alpha shareholders will get one Cohere share for every nine Aleph Alpha shares, but the companies did not comment on the financial details.

A major part of the plan is a new funding round led by Schwarz Digits, the technology arm of Schwarz Group, which owns Lidl. Schwarz Digits said it has committed $600 million, including money for research. Its data centres are expected to provide the computing facilities needed to run Cohere’s AI systems.

Both companies mainly sell to businesses and governments. They have focused on “sovereign” AI, which means customers can keep control of their data and the computers that run the system (like keeping your important files in a safe at home, instead of leaving them in someone else’s warehouse).

Why it matters

More governments and companies outside the US say they want options besides large US and Chinese tech providers. If this deal succeeds, it could make it easier for public agencies and regulated industries, like finance and healthcare, to use AI while keeping sensitive information under local rules and local oversight.

Source: Financial Times