Enterprise AI sovereignty requires full stack control
Cohere VP emphasizes the importance of sensitive data control.
1What is AI Sovereignty?
Cohere VP Rachad Alao emphasized at VB Transform 2026 that AI sovereignty is more than just downloading open-source models or running them behind corporate firewalls. For organizations operating critical systems like banks, hospitals, and governments, controlling where data resides and how AI is managed is paramount.
2Full Stack Control
Alao stated that enterprise AI sovereignty requires control over the entire stack, from GPUs and private cloud infrastructure to governance systems that route requests among models. This also includes connectors, search tools, and agent frameworks working on enterprise data.
3Token Prices and Consumption
Despite the central economic argument for smaller, locally deployed models being falling token prices, Alao pointed out that total consumption is increasing even faster. As organizations move from simple chatbots to agents that solve problems, call tools, and take multiple steps, token usage is growing exponentially.
4Choosing the Right Model
Alao recommended routing tasks based on the intelligence required and sensitivity, rather than sending every request to the largest frontier model. For example, a Canadian bank uses Cohere's on-premises models for highly regulated workloads while leveraging larger models for less sensitive tasks.
5Open Source vs. Proprietary Models
When asked how Cohere's open-source North Mini Code model could compete with proprietary coding models, Alao acknowledged that frontier models might perform better on the hardest tasks but stressed that this doesn't justify indiscriminate use. For 80% of use cases, the open model is more effective and cost-efficient.
6Multimodal Search
Alao noted that enterprise search has evolved beyond retrieving text and inserting it into a model's context window. Today's state-of-the-art involves multimodal search, extending beyond text to include documents, images, and other information forms, becoming an integral part of agent workflows.