At VB Transform 2026, a Cohere executive argued that enterprise AI sovereignty—the ability to control sensitive systems without vendor lock-in—requires organizations to manage not just the AI model but the entire agent infrastructure. For mission-critical applications in banking, healthcare, and government, simply downloading an open-source model or running it behind a firewall is insufficient; companies need end-to-end control over where data resides and the freedom to change vendors.
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Rachad Alao, vice president of product engineering at Canadian AI startup Cohere, spoke at VB Transform 2026 in Menlo Park about building AI agent systems while keeping sensitive data and infrastructure under enterprise control. Alao, who previously led responsible AI teams at Google and Meta, argued that AI sovereignty requires more than just running an open model behind a corporate firewall.
Why it matters
Banks, hospitals, and governments operating mission-critical systems need tight control over where their data resides and the ability to switch vendors without being locked into a single AI provider. For enterprises handling sensitive information, partial measures—downloading a model or using a firewall—are insufficient; true sovereignty demands control over the entire AI agent stack.
What to watch
The talk reflects growing concern among large organizations that relying on third-party AI infrastructure and vendors could expose proprietary operations or create dependency. Cohere's emphasis on full-stack control suggests the startup is positioning itself to serve enterprises unwilling to cede operational autonomy to larger cloud or AI vendors.
VB Transform 2026 brought together hundreds of enterprise leaders and technical experts at the Hotel Nia in Menlo Park to discuss how generative AI agents can drive business outcomes. During a fireside chat with VentureBeat CEO and editor-in-chief Matt Marshall, Rachad Alao, vice president of product engineering at the Canadian enterprise AI startup Cohere, articulated a vision of enterprise AI that prioritizes sovereignty—the ability to build AI systems without surrendering sensitive data, infrastructure control, or vendor flexibility. Alao, who spent earlier stages of his career leading responsible AI and trust and safety engineering teams at Google and Meta, brought credibility to the conversation around balancing AI capability with organizational safety. When asked to define sovereignty, he made clear it applies to organizations running mission-critical systems: banks, hospitals, and governments. For these institutions, Alao argued, it is critical to have tight control over where data resides. His point pushed back against a simpler narrative—that enterprises can achieve sovereignty by simply downloading an open-source model or running an AI application behind a corporate firewall. True sovereignty, he suggested, demands control of the full agent stack: not just the model, but the entire system orchestrating AI behavior, data flow, and vendor relationships. This framing positions Cohere's offering as more comprehensive than point solutions, appealing to enterprises that view AI independence as a strategic necessity rather than a luxury.
The talk at VB Transform 2026 reflects a tension shaping enterprise AI adoption: the desire for advanced AI capabilities versus the need to retain operational control. Alao's framing—that sovereignty means more than simply deploying an open model behind a firewall—suggests that many organizations have realized that outsourcing AI infrastructure to a single vendor creates risk. Banks, hospitals, and government agencies handle data and processes too sensitive to trust to vendor-controlled systems, where terms of service, security incidents, or business decisions at the vendor could undermine the enterprise's autonomy. By emphasizing full-stack control, Cohere positions itself in a market segment concerned not just with model quality but with independence: the ability to switch providers, audit operations, and ensure data never leaves controlled environments. This message resonates particularly with large, regulated organizations where loss of control carries legal and operational consequences.
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