The Canadian government is taking an equity stake in Cohere, joining a funding round led by Germany's Schwarz Group targeting C$7 billion ($4.49 billion) for the Toronto-based AI lab, Cohere said on Thursday.
The round would value Cohere at about C$36 billion. Schwarz, which owns the Lidl and Kaufland retail chains, pledged €500 million to lead the round in April as part of Cohere's merger with the German AI developer Aleph Alpha.
Cohere said the money will fund model development, products for regulated industries and computing infrastructure.
In Montreal, Canadian Prime Minister Mark Carney said Ottawa would invest up to C$1.6 billion in Cohere. Other investors included Nvidia and BCE's Bell Canada subsidiary, he said.
"Cohere will stay Canadian, creating more opportunities for our workers and businesses. Its incorporation and headquarters will remain here," he said in a speech.
Cohere will invest at least C$1.7 billion in new computing infrastructure in Canada by 2030, he added.
Cohere CEO Aidan Gomez called the government's investment "a huge honour."
Schwarz, which owned more than 20% of Aleph Alpha, spent €16 billion on new data centres in Germany. Schwarz Digits CEO Christian Müller said the group plans to run Cohere's models on its STACKIT cloud, calling the investment the next step after the Aleph Alpha deal.
Cohere has completed only an initial close of the round and did not say how much has been committed so far or when it expects the round to close.
The company said annual recurring revenue grew 165% year over year as of the third quarter and that its customer count has grown to 300.
(1 euro = 1.5596 Canadian dollars)($1 = 1.3991 Canadian dollars)