Nvidia-Backed Cohere Says IPO Timing Uncertain Despite Surging Revenue

Canadian artificial-intelligence company Cohere’s timeline for going public remains uncertain despite surging revenue, its chief executive said, as the startup draws fresh backing from Nvidia and the Canadian government.

The Toronto-based startup sells AI models to governments and companies in regulated industries, allowing customers to retain control over their data and where the technology is deployed. Its revenue has doubled each year for the past three years, executives told reporters in a media roundtable Thursday.

Cohere recently completed the initial close of a Series E funding round targeting up to seven billion Canadian dollars, equivalent to about US$5 billion. The round, backed by Nvidia and the Canadian government, would value the company at around US$25 billion.

Canadian Prime Minister Mark Carney last week announced the government’s investment of C$1.6 billion, saying it is part of an effort to build up the country’s AI sovereignty.

But Chief Executive Aidan Gomez said the timing of a potential initial public offering depends on market conditions as well as the company’s readiness.

“It depends on not just us but the market as well,” Gomez said. “What we’re focused on is just building a strong business with healthy economics.”

“When there’s a good time in [the] market we’ll definitely pursue that,” he added.

The company is seeking to capitalize on demand from businesses and governments for greater control over their AI technology and data. That push for so-called sovereign AI is central to its planned merger with Germany’s Aleph Alpha, announced earlier this year.

The companies have pitched the combination as an alternative for countries seeking to reduce their dependence on U.S. and Chinese technology providers.

“I think everyone is looking for another democratic realm in the set of options, and so being able to bring that as a Canadian-German company, I think is core to our value proposition,” Gomez said.

Meeting that demand, however, requires access to scarce computing capacity.

Gomez described demand for computing power as “genuinely insane,” saying some providers are running blind auctions in which prospective buyers have to make their offer and negotiate with the sellers. Cohere is giving priority to margins and its balance sheet over securing capacity at any price, he said.

“We are not just going to pay insane numbers,” Gomez said.

Cohere plans to expand its presence in Asia-Pacific fourfold by the end of 2027 through new investments, local partnerships and additional offices, it said.

Gomez said customers in the region have historically placed greater emphasis on sovereignty and control over technology than those in Europe and Canada.

Write to Kimberley Kao at kimberley.kao@wsj.com