Cohere and Aleph Alpha announced their merger on Friday 24 April at a combined valuation of $20 billion, with Germany's Schwarz Group putting $600 million into Cohere's Series E as anchor investor1. The talks had been reported as advanced two weeks earlier. Schwarz, owner of Lidl and Kaufland, also owns STACKIT, the SEAL-3 awardee in the Commission's €180m sovereign cloud framework, and held a strategic stake in Aleph Alpha before the merger.
The combination closes a loop no other European private actor can. STACKIT runs the cloud. The merged Cohere-Aleph entity supplies the model. Lidl and Kaufland, which between them turned over more than €175 billion last year, are the captive enterprise customer the merged entity needs to scale on European compute rather than US hyperscalers. The Sovereign Tech Europe conference had no European AI model company on its speaker list; the European AI model company was being assembled off-stage that week.
Berlin's publicly stated conditions on the merger, that development services remain in Germany and infrastructure deployment stay sovereign, do operational work the conference's panellists did not. If enforced as deal terms, they push the merged entity onto STACKIT, closing the triangle. Both companies sit below the €500 million EU turnover threshold for automatic Commission review, but the competition directorate signalled in 2025 that AI-sector consolidation would face Digital Markets Act amendment scrutiny regardless. Bundeskartellamt filing has not been confirmed; Canadian Competition Bureau clearance is also required, and the deal is expected to close in the second half of 20262.
