Cohere Bets on Merchant Silicon as Rivals Pivot to In-House Chips

In an industry increasingly defined by the race to build proprietary hardware, Toronto-based AI developer Cohere is intentionally steering clear of the fabless model, as BetaKit first reported.

Speaking with Bloomberg AI reporter Rachel Metz at the ALL IN conference in Montréal, Cohere CEO Aidan Gomez stated that the company has no desire to enter the chip-making business. According to BetaKit, Gomez explained the decision by noting, “We don’t want to get into the space of building chips because there’s so much more we could do.”

This strategy places Cohere at odds with several of its primary competitors. BetaKit reports that Google, OpenAI, Anthropic, and Mistral have all either begun exploring or are actively moving forward with the development of their own semiconductors this year. The drive toward vertical integration is largely fueled by the ability to optimize hardware specifically for model efficiency within data centers, which can lower the cost of AI inquiries and reduce dependency on dominant providers like Nvidia.

However, Cohere is doubling down on the merchant silicon ecosystem. In a 2024 episode of the 20VC podcast with Harry Stebbings, Gomez noted that Cohere maintains relationships with both AMD and Nvidia. He explained that this approach is necessary to support the requirements of Cohere's customers, who want the flexibility to run AI models across a diverse range of platforms.

Rather than investing in hardware, Cohere is focusing on expanding its footprint as a sovereign AI provider. BetaKit reports that Gomez recently announced a business combination agreement with Aleph Alpha, a German peer. This acquisition will push Cohere's total employee count beyond 1,000 across Europe and Canada as the company competes with Anthropic and OpenAI. Additionally, BetaKit notes that Cohere is reportedly approaching a Series E fundraising round valued between $2 billion and $3 billion USD.