Canada Invests $1.6B in Cohere, Boosts AI Sovereignty
The federal government will invest up to $1.6 billion in Canadian AI startup Cohere Inc. as part of its $7 billion fundraising round, marking the largest private capital raise in Canada.
This round values Cohere at $35.7 billion, making it Canada’s most valuable private tech company. The government’s investment aligns with its new national security strategy, which identifies AI as one of eight key sectors critical to Canada’s sovereignty.
“We’re not waiting for the future of AI to be decided somewhere else by those we don’t know or by whom we don’t trust,” Prime Minister Mark Carney said. “Cohere has grown from a Toronto startup into a global company. It’s a Canadian success story … and now, Canada has a stake in it.”
The government is investing in Cohere on a commercial basis, joining Nvidia Corp., BCE Inc., and Germany’s Schwarz Group, which leads the round.
Carney stated the investment will enable Cohere to create 1,000 new high-paying Canadian technical jobs and invest at least $1.7 billion in new computing infrastructure in the country by 2030. The agreement also ensures Cohere remains a Canadian company, he added.
AI and Digital Innovation Minister Evan Solomon described the investment as “hugely significant,” noting it positions Canada among the United States, China, and France as one of four countries developing advanced large language models.
“We see Cohere as a strategically important company to our national security,” Solomon said.
According to chief financial officer Francois Chadwick, Cohere will use the funds to advance its large language models and AI tools for business and government, as well as invest in infrastructure for model training.
For the tech industry, this investment reflects a shift in Canada’s AI strategy. By supporting Cohere, the government aims to nurture a domestic AI ecosystem, reducing dependence on foreign tech giants and open-source models from China. This move could enhance Canadian businesses’ and researchers’ global competitiveness while addressing national security concerns.
Cohere has positioned its systems as alternatives to Big Tech and China’s open-source models as governments worldwide seek to strengthen their sovereign tech capabilities. In September, the company acquired German AI startup Aleph Alpha GmbH, forming a transatlantic AI leader to expand its global presence.
