Written on 11 November 2023, updated on 1 July 2025
Dieter Schwarz ’s vision becomes very clear in 2024. You’ll find it at the end of the article, along with some figures relating to the retail giant Lidl, which he founded and continues to lead.
The owners of the Lidl supermarket chain are among those investing more than $500 million in the German artificial intelligence start-up Aleph Alpha, as it seeks to capitalise on a global boom in the sector. The Schwarz Group, which controls Lidl and is building a new IT division, is co-leading the deal alongside an artificial intelligence hub based in the city of Heilbronn, in south-west Germany, which was jointly established by a foundation set up by Dieter Schwarz, the founder of Lidl.
Other investors include the venture capital arm of Bosch, Europe’s largest supplier of car components, according to a statement from Aleph Alpha. Founded in 2019, Aleph Alpha is one of Europe’s leading start-ups focusing on generative AI – software capable of creating text, images or sophisticated computer code that mimics human capabilities.
However, the German start-up may struggle to make its mark in an increasingly crowded generative AI market, with better-funded competitors such as OpenAI – backed by Microsoft, Google and Meta, Facebook’s parent company – investing heavily in the sector.
Aleph Alpha, which has around 70 employees, aims to set itself apart by offering data protection, security and transparent software to clients, even in sensitive sectors such as law enforcement and healthcare. It has already raised around €28 million. “We need to ensure we have a hand on the wheel of how the future will unfold,” Aleph Alpha’s chief executive, Jonas Andrulis, told the Financial Times. The company’s clients “have full sovereignty over what is happening”.
Around a quarter of the funding comes from an equity investment, whilst the remainder consists of research grants and joint business development commitments that will not dilute shareholders, said people familiar with the deal. They added that Aleph Alpha’s equity would be valued at around 500 million euros in the deal. The company has not disclosed its valuation.
Schwarz Group, an unlisted, family-controlled giant with an annual turnover of €154 billion and 575,000 employees worldwide, is best known for its Lidl discount supermarkets. But it has also branched out into food production, recycling and IT services.
In September, it consolidated its cloud and cyber security offerings into an autonomous unit, Schwarz Digits, which serves the rest of Schwarz’s operations and external clients. In 2023, Dieter Schwarz backedthe Heilbronn hub, Innovation Park Artificial Intelligence, which is also funded by the state of Baden-Württemberg and aims to become Europe’s largest artificial intelligence cluster.
“Liquidity is necessary, but not sufficient,” said Andre Retterath, a partner at venture capital firm Earlybird and a member of Aleph Alpha’s board of directors. The partnerships will give the company “access to computing power, access to talent and market distribution”, he said.
Earlybird led a funding round in 2021 for the German start-up. Aleph Alpha wants to accelerate its expansion as it anticipates a window over the next 12–24 months during which companies will test and select the artificial intelligence software they intend to use. Whilst some of Aleph Alpha’s competitors have developed close corporate relationships with the largest technology groups, the company has emphasised that it is independent.
Other investors in the consortium include the IT firm Hewlett Packard Enterprise and the German software company SAP, as well as the venture capital group Burda Principal Investments and existing backers. The company has previously been backed by the venture capital firms UVC Partners, LEA Partners, 468 Capital, Cavalry Ventures and Lakestar.
Last year, the unit generated €1.9 billion in annual revenue and employs 7,500 staff.
Meanwhile, since 2022, its global turnover has risen to €167.2 billion in annual sales in 2023. And it has not finished expanding in northern Italy: Lidl is growing by 60% in Area 1
Read also:
The Schwarz Group (Lidl) expands into the production of fast-moving consumer goods
Lidl sets out to conquer Milan
N.B.: one can have a youthful approach even if one is of advanced age: Mr Dieter Schwarz – pictured below – has turned 84.
