BMDS/Woithe
Aleph Alpha and Mistral were Europe’s hopes to break free from the stranglehold of the big US AI players. This dream now seems to burst like a soap bubble. The Canadians, more precisely Cohere, are taking over Aleph Alpha. And US billionaire Elon Musk is rumored to be putting his fingers out for Mistral. If that doesn’t work, a partnership will at least be considered.
But first things first. Let’s look at Aleph Alpha first. The takeover of Aleph Alpha by the Canadian AI company Cohere is officially referred to as a merger. But there is a flaw in the matter: the existing Cohere shareholders will hold 90 percent of the merger between the two companies. Germany’s AI hope is passing into Canadian hands.
Aleph Alpha sale – just a political deal?
And the deal still has a flaw. He appears to be primarily politically motivated. It was not the two companies or their shareholders who announced the merger, but politicians: namely Federal Digital Minister Karsten Wildberger and his Canadian counterpart Evan Solomon.
Wildberger praised the deal highly: “Cohere and Aleph Alpha are joining forces – a strong signal for Germany as an AI location. What is being created here is a German-Canadian AI model: safe, confident, competitive.” The minister further enthused that this would create a strong alternative to existing offers. And this digital sovereignty is a decisive criterion for the awarding of public contracts.
Just an AI dwarf?
A strong alternative? You could almost cry in the face of so much naivety. In global competition with heavyweights like OpenAI, Anthropics and Co., even the merged company is still a tiny one. And in order to realize its AI plans, Cohere has so far been dependent on support from the Americans: Oracle has previously provided the infrastructure on Google Cloud and the computing power for AI training – set up by early Cohere investor Index Venture. Real sovereignty looks different.
However, the question of AI computing power could change. The merged company will use the Schwarz Group’s data centers – i.e. Schwarz Digits – in the future. The Schwarz Group only increased its stake in Aleph Alpha to around 28 percent at the beginning of the year after taking over the shares from Bosch Ventures. And the Schwarz Group will also continue to be heavily involved in the new AI company. It is expected to invest around half a billion euros in the next financing round.
Black group as a laughing third party
The bottom line is that the Schwarz Group appears to be one of the winners in this deal. However, this can be doubted for Germany as a business location. Even if political Berlin celebrates the merger as a “milestone for the German-Canadian Digital Alliance” and praises it as a “decisive step for the technologically sovereign future of both countries”.
But how quickly such alliances break down and allies become enemies should also be understood in political Berlin by now. The USA was also a reliable partner for decades until the erratic man came to the White House. Therefore, making oneself dependent on a non-European partner again – and also for one of the most important digital topics – is downright irresponsible.
Musk reaches for Mistral
But when it comes to sovereignty, things get even worse. Business Insider reports rumors that Elon Musk is probably reaching out to the French AI company Mistral. If this does not succeed, at least cooperation is planned. In connection with the takeover of the coding company Cursor, the eccentric billionaire wants to stand up to OpenAI and Anthropic. SpaceX already has an option to acquire Cursor for up to $60 billion.
With both companies. Regardless of whether it is an acquisition or cooperation, Musk could massively expand his own AI empire xAI. He has already built the computing power required for this with the Colossus supercomputer. With around 200,000 graphics processing units (GPUs), it is considered the most powerful AI computing cluster in the world.
Panic in German executive suites?
If Musk implements his plans in addition to selling Aleph Alpha, then European dreams of AI sovereignty may be over for the time being. However, there is hope that French national pride will prohibit such a move. And when it comes to protecting its own vital interests, Paris has had fewer inhibitions than Berlin in the past.
We were told behind closed doors how seriously and with what suspicion the matter is being pursued in this country: Apparently there have already been crisis meetings in the executive suites of some German companies with AI solutions: They see the value proposition of their products, which they market as sovereign thanks to Mistral AI, floating away.
