<![CDATA[Canadian AI Newsletter]]>https://www.canadianai.techhttps://substackcdn.com/image/fetch/$s_!KTay!,w_256,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F65e2f0e6-287b-4eff-9d56-c41d840841b7_256x256.pngCanadian AI Newsletterhttps://www.canadianai.techSubstackThu, 09 Apr 2026 15:20:42 GMT<![CDATA[Canadian AI: Defence AI has a moment, and 93% of companies are using AI but only 2% can prove it's working.]]>https://www.canadianai.tech/p/canadian-ai-defence-ai-has-a-momenthttps://www.canadianai.tech/p/canadian-ai-defence-ai-has-a-momentTue, 07 Apr 2026 11:02:57 GMT

Good morning! Welcome to the Canadian AI Newsletter, a weekly rundown for founders, operators and investors.

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I am Raif Barbaros, Partner at Mistral Venture Partners. Views are my own.

This was the week defence AI went from “emerging theme” to “dominant storyline.” Lockheed Martin wrote a $3.6M cheque to an Ottawa AI shop. Five Canadian reservists built an LLM-powered cyber tool that was the only AI capability at a NATO exercise. Ottawa pushed $13.8M into BC defence AI startups. And Clearpath Robotics’ co-founder sat down with BetaKit to explain why Canada needs more robots, not fewer, in its military. Meanwhile, the federal government put $79.5M behind AI in manufacturing, Shopify revealed the internal engineering playbook that explains how it keeps shipping without adding headcount, and KPMG dropped a stat that should make every enterprise AI vendor uncomfortable: 93% of Canadian organizations are using AI, but only 2% can show a return on it. The money is flowing. The question is whether the results will follow. Let’s get into it.

💰 Deals & Milestones

  • Lemay.ai (Ottawa) secured a $3.6M investment from Lockheed Martin Canada for collaborative AI R&D in defence and aerospace.

    • Focus areas: predictive aircraft maintenance, supply chain optimization, GPS-denied navigation, and “sovereign knowledge management” for the Canadian Armed Forces.

    • Investment enabled by Canada’s Industrial and Technological Benefits (ITB) policy, tied to the CC-130J Super Hercules fleet. Includes collaboration with the Czech Aerospace Research Centre.

    • Lemay.ai is a small Ottawa shop (founded 2015 by CEO Matt Lemay) that has delivered AI solutions to NATO and defence clients. Minister Joly framed this as “how defence investments can strengthen national security while driving economic growth at home.”

    • Defence AI keeps landing in Ottawa. Between this, Denvr’s two partnerships (Issue 7), Larus Technologies’ $8.3M contract (Issue 7), and Dominion Dynamics’ $50M commitment (Issue 4), the capital’s defence-AI cluster is becoming hard to ignore.

  • WELL Health Technologies (Vancouver, TSX: WELL) partnered with AliveCor to bring AI-powered cardiac monitoring to Canadians.

    • AliveCor’s Kardia platform uses Health Canada-licensed AI algorithms to detect three common heart arrhythmias from 30-second ECG recordings. WELL’s Canadian-registered cardiologists provide clinician reviews within 24 hours.

    • Addressing a real bottleneck: elective cardiology wait times are up 53%, with Canadians waiting an average 15.3 weeks for specialist consultations.

    • Future phases may deploy AliveCor’s pocket 12-lead ECG across WELL’s 250+ clinic network. AI tackling healthcare wait times is exactly the kind of real-world application that moves the needle.

  • Aspect Biosystems (Vancouver) announced a $280M partnership with the Government of Canada, including $79M in federal investment through the Strategic Response Fund.

    • UBC spinout building AI-powered 3D-bioprinted tissue therapeutics, primarily targeting Type 1 diabetes. Partnership with Novo Nordisk (Ozempic maker) since 2023.

    • ~130 employees, $250M+ USD raised to date. One of the largest single federal investments in a Canadian biotech company.

    • The AI component powers the bioprinting platform itself. The $79M is a significant bet on Vancouver’s deep-tech corridor.

  • AXL (Toronto) appointed nine U of T professors as its inaugural Faculty Fellows cohort, bringing industry expertise from Nvidia, NASA, Samsung, Adobe, Intel, and Microsoft.

    • Notable fellows include Gennady Pekhimenko (Nvidia senior director of AI software, CentML co-founder, Vector Institute faculty), Sven Dickinson (former head of Samsung Toronto AI Research Centre), and Steve Easterbrook (former NASA lead scientist).

    • Fellows compensated with “sweat equity” units across every studio company. AXL has approved nine investments to date and is on pace for its goal of launching 50 AI companies in five years.

    • CEO Daniel Wigdor is explicitly framing this as a brain drain countermeasure. The calibre of this cohort says something about the pull of Toronto’s AI ecosystem when the incentive structure is right.

  • ThinkLabs (New York / Toronto) closed a $28M USD Series A to help utility providers modernize power grids under strain from AI data centre demand.

    • Led by Energy Impact Partners, with NVentures (Nvidia’s VC arm) and Edison International. Previously raised $6.8M CAD seed from GE Vernova.

    • Uses “physics-informed AI” to build digital twins of power grids. Compresses month-long infrastructure studies into under three minutes. Runs 10 million scenarios in 10 minutes with >99.7% accuracy.

    • Founded by UWaterloo Engineering alum Josh Wong, who previously led Toronto Hydro’s smart-grid division and founded Toronto-based Opus One Solutions (sold to GE in 2022). ThinkLabs maintains a Toronto office and is actively hiring in Canada.

🏢 Large Company / Big Tech

  • Shopify (Ottawa/Toronto) revealed its AI-first engineering playbook in a detailed Bessemer Venture Partners interview with VP & Head of Engineering Farhan Thawar.

    • Key detail: Shopify built a centralized LLM proxy routing all AI requests through a single platform layer. Engineers now run multiple AI agents in parallel on different parts of the codebase, then review and merge outputs.

    • Engineering team estimates ~20% productivity gains from AI. Thawar described the 2026 shift as “agentic harnesses” and warned: “If you don’t figure out how to harness agents in 2026, you’ll be behind.”

    • Shopify has now appeared in all eight issues of this newsletter. At this point I should just give them a recurring column. But this one is different from the merchant-facing product announcements we’ve covered before. This is about how Shopify is rewiring its own engineering DNA. The “no net new hires while growing revenue” story (Issue 4) now has a technical explanation.

🔬 Research

  • CAFCYBERCOM (Canadian Armed Forces Cyber Command) showcased a homegrown AI-enabled cyber tool at NATO’s Coalition Warrior Interoperability Exercise (CWIX) in Poland.

    • A five-member team from 33 Signals Regiment built an LLM-powered Cyber Indications and Warning tool for cyber analysis, translation, and geolocation. Canada was the only participant in the cyber portion to employ an AI-driven capability. Selected for CWIX Innovation Spotlight.

    • Built by reservists working Class A time since January 2025. The tool aims to integrate cyber intelligence into the National Common Operating Picture.

    • LCol Liam Robertson: “This project shows what is possible when you empower small, motivated teams to experiment and deliver.”

    • Five reservists. Class A time. An LLM tool that was the only AI capability at a NATO exercise. This is the kind of story that makes you proud of what scrappy Canadian teams can build with minimal resources.

🏛️ Policy

  • NGen (Next Generation Manufacturing Canada) announced $79.5M for 20 AI projects to help Canadian manufacturers adopt AI. Announced at the N³ Summit in Toronto, with AI Minister Evan Solomon in attendance.

    • $29.2M in new federal funding through the Pan-Canadian AI Strategy, combined with $50.3M from industry partners. The ~2:1 private-to-public co-investment ratio shows strong industry buy-in.

    • Named participants include e-Zinc + Katalyze AI (AI battery quality control), Xaba + Martinrea International (AI vision robotics for powerpacks), InPho/ElectroPhotonic-IC (AI in semiconductor manufacturing), and Magna International (applied AI robotics).

    • Canada’s manufacturing robotics adoption rate sits at only 8.4%, below Thailand and Mexico. NGen CEO Jayson Myers: “These projects are about turning Canadian AI into Canadian productivity.”

    • This is the Pan-Canadian AI Strategy shifting from research to production. The fact that Magna is in the mix signals that serious industrial players see AI manufacturing as a near-term operational upgrade, not a science project.

  • PacifiCan invested $13.8M in five BC projects through the Regional Defence Investment Initiative (RDII), advancing AI and aerospace technologies.

    • AI-specific investments include: $1.4M to UVic’s Advanced Control and Intelligent Systems Lab for an AI-powered autonomous drone mapping system; $2.4M+ to Atreides for an AI-enabled unmanned systems data platform; $2.8M+ to OSI Maritime Systems for AI-augmented collision avoidance software.

    • Part of the $379.2M national RDII under the Defence Industrial Strategy. Three of five funded projects have explicit AI applications.

    • Defence AI funding is no longer concentrated in Ottawa. Vancouver Island is now on the map. Atreides and OSI Maritime Systems are names worth watching.

  • Michael Schull (President & CEO, Digital Research Alliance) and Feridun Hamdullahpur (former UWaterloo president) authored a Hill Times op-ed arguing that sovereign Canadian AI requires investments beyond compute infrastructure.

    • Key argument: “Sovereign AI requires more than infrastructure; it depends on data and talent to translate capacity into real-world impact.”

    • The critique complements last week’s budget euphoria. The money is flowing, but without the data ecosystems and talent pipelines to back it up, sovereign compute becomes expensive empty infrastructure.

📊 Data

  • KPMG Canada published “Beyond AI Adoption: Turning Canada’s AI Momentum into Measurable Returns”, surveying Canadian business leaders.

    • 93% of organizations now using or piloting AI, up from 61% the previous year. But only 2% report measurable ROI. Only 31% have fully integrated AI across core operations.

    • Canada ranks 42nd of 47 countries in AI trust and 44th of 47 in AI literacy. Only 29% of employees say their employer has a comprehensive AI use policy.

    • The 93%/2% gap is the stat of the week. Nearly everyone is experimenting. Almost nobody can prove it’s working. Last issue, MNP found 91% satisfied with AI progress but only 4% called it “transformational.” The pattern is clear: adoption is outrunning outcomes. The next wave of enterprise AI value gets created when that gap closes.

  • CFIB (Canadian Federation of Independent Business) reported that 45% of Canadian small businesses are now using generative AI.

    • Usage scales with firm size: 39% for firms under 5 employees, 60%+ for firms with 20-49 employees.

    • 78% of firms plan to maintain or increase AI training spending in 2026. AI investment and employee training spending are moving in lockstep.

    • Small business AI adoption doesn’t get enough coverage. The 45% figure for SMBs is remarkably high and suggests the AI wave is reaching well beyond the enterprise tier.

In brief

  • Globe and Mail updated its newsroom AI policy: staff and contributors are now prohibited from using AI to edit or write any part of a story. The piece also surfaced the “Victoria Goldiee” saga, where an AI-generated freelancer was submitting work to a Canadian magazine. Canadian journalism is drawing hard lines.

  • Natural Resources Canada opened applications for its “AI for Canadian Energy Innovation” program. Grants of $500K to $1.5M per project, covering up to 75% of costs, running through March 2030. Fresh federal money for energy-AI R&D.

  • ConstructConnect published a major feature on Canada’s AI data centre construction boom. Key numbers: Bell’s $1.7B Saskatchewan facility (300 MW, Canada’s largest), eStruxture’s $750M CAL-3 in Rocky View County, Alberta, and proposed Alberta data centre load of 21 GW against a provincial peak grid capacity of 12.8 GW. The physical layer of Canadian AI keeps getting bigger.

  • Canadian Mining Journal explored how AI data centre demand is rewriting mineral markets for Canadian miners. Copper, lithium, rare earths. Canada’s geology, governance, and proximity to the US position it well in the AI supply chain. Read about how AI is driving this demand all the way down to what’s underground.

  • Clearpath Robotics co-founder Ryan Gariepy sat down with BetaKit for a Q&A on lethal autonomous weapons and Canada’s defence strategy. Gariepy, who led Clearpath from founding through its ~$600M USD acquisition by Rockwell Automation, now chairs the Canadian Robotics Council. His position: he supports military robots for logistics, recon, and even weaponized applications with proper controls, but draws the line at fully autonomous lethal decision-making. On Canada’s opportunity: “We have a lot more space, a lot fewer people, and our environment is a lot more hostile. That is the perfect place for robotics.” Worth the full read.

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— Raif Barbaros

]]><![CDATA[Canadian AI: Cohere's opensource voice model tops the leaderboard, and governments open the chequebook.]]>https://www.canadianai.tech/p/canadian-ai-coheres-opensource-voicehttps://www.canadianai.tech/p/canadian-ai-coheres-opensource-voiceTue, 31 Mar 2026 10:31:22 GMT

Good morning! Welcome to the Canadian AI Newsletter, a weekly rundown for founders, operators and investors.

Was this forwarded to you? Subscribe below.

Subscribe now

I am Raif Barbaros, Partner at Mistral Venture Partners. Views are my own.

This was the week both levels of government showed the receipts. Ottawa’s Budget 2025 received royal assent ($1.75B for VC, $81.8B for defence) and Ontario dropped a $4B investment fund targeting AI and defence the very next day. Meanwhile, Cohere shipped an open-source voice model that topped leaderboards on arrival, a UBC researcher’s “AI Scientist” published in Nature, and defence AI deals kept landing in Ottawa and Calgary. The money is moving. The infrastructure is getting built. And the policy machinery, for once, is actually keeping pace. Let’s get into it.

💰 Deals & Milestones

  • Cohere (Toronto) launched Transcribe, its first-ever voice model. Open-source, and immediately #1 on the leaderboard.

    • 2-billion-parameter automatic speech recognition model, released under Apache 2.0. Ranked #1 on Hugging Face’s Open ASR Leaderboard with a 5.42 word error rate, beating OpenAI Whisper, IBM Granite, ElevenLabs Scribe, and NVIDIA Parakeet.

    • Supports 14 languages including English and French. Processes 525 minutes of audio per minute of compute. Runs on consumer-grade GPUs.

    • Will be integrated into Cohere’s North enterprise agent platform. Open-source strategy continues: Tiny Aya (Issue 2) for multilingual text, now Transcribe for voice. Cohere is building in the open faster than anyone expected.

    • (Disclosure: Cohere is a portfolio company.)

  • Miraterra (Vancouver) secured a $16M CAD seed extension for its AI-powered soil intelligence platform.

    • Oversubscribed (originally structured at $13.9M). Led by At One Ventures with Farm Credit Canada, S2G Investments, Sitka Foundation, and iSelect. Total funding now ~$40M.

    • Independent Terramera subsidiary uses AI to decode satellite and LIDAR imaging for soil chemistry and biology. Recently acquired Trace Genomics’ IP and labs.

    • 50-person team, recently began generating revenue. CEO Nate Kelly: “Three years ago, we just had a Digitizer. Today, it actually has a full working stack.”

    • AgTech meets AI. The kind of deep-tech, real-economy startup Canada should be building more of.

  • Denvr Dataworks (Calgary) signed two defence AI partnerships in a single week.

    • With Ottawa’s Dominion Dynamics: building Canada’s first sovereign AI simulation environment for autonomous drones (Autonomous Collaborative Platforms) supporting the Royal Canadian Air Force. Simulation ready in ~3 months, operational drone capability in 24–30 months, targeting Arctic operations and NORAD modernization.

    • With Ottawa’s Sapper Labs: AI-enabled intelligence and cyber defence for the Canadian Armed Forces.

    • Both leverage Denvr’s Canada AI Platform (CAIP), a fully sovereign AI platform under Canadian jurisdiction. Calgary company, Ottawa defence customers, Arctic mission. The geography of Canadian defence AI is taking shape.

  • Larus Technologies (Ottawa) awarded an $8.3M IDEaS Test Drive contract by the Department of National Defence.

    • AI/ML for tactical planning and decision intelligence. The challenge: “Staying Four Steps Ahead: Understanding and Predicting the Behaviour of Adversaries.”

    • Larus will configure its MAABI platform for automated analysis, predictive insights, pattern identification in troop movements, and automated wargaming simulations.

    • DND is clearly in buying mode for AI. Between Denvr’s two deals and Larus’s contract, that’s three defence AI agreements announced in a single week.

  • Opendoor (San Francisco/Toronto) is opening an AI builder hub in Toronto with plans for up to 100 roles.

    • Led by former Shopify exec and CEO Kaz Nejatian. Office at King and Spadina, hiring across operations, finance, and engineering.

    • No immediate plans to enter the Canadian market. This is a talent play. Nejatian called Toronto “the single greatest source of raw, high-talent people in the world.”

    • I agree, 1000%.

🔬 Research

  • UBC’s “AI Scientist” published in Nature: a system that can autonomously conduct the entire scientific research process.

    • Built by UBC Prof. Jeff Clune and PhD student Shengran Hu (with Vector Institute, Sakana AI, University of Oxford). The system generates hypotheses, checks literature, writes code, runs experiments, analyzes data, writes papers, and performs peer review.

    • An AI-generated paper passed peer review at an ICLR workshop with a score of 6.33. The automated reviewer achieves 69% balanced accuracy, surpassing human-to-human agreement.

    • Clune noted this represents “the dawn of a new chapter.” Key finding: paper quality improves as foundation models improve, suggesting a scaling law for AI-driven science.

    • Ethical precautions included watermarking and withdrawing the accepted paper. A concurrent Nature editorial addressed the implications. This is the kind of research that makes you sit with it for a minute.

  • Mila and Mozilla announced a strategic partnership to build open-source AI tools. This is Mozilla’s first-ever partnership with a major AI research lab.

    • Initial $1M CAD investment for the first research project, plus extensive engineering collaboration. Expected to be multi-year.

    • First project: private memory architectures for AI agents, allowing users to switch between language models without losing conversation data. Reducing dependence on closed AI systems.

    • Mila CEO Valérie Pisano called it a “landmark.” Mozilla President Mark Surman: “Canada can lead on AI sovereignty; we’re joining with Mila to make it happen.”

  • Vector Institute extended its collaboration with Roche through 2030, continuing a partnership across all three national AI institutes (Amii, Mila, Vector) that began in 2020.

    • Vector provides talent, AI engineering capabilities, and specialized training.

    • Pharma is one of the clearest enterprise AI use cases with real budget behind it. Roche recommitting through 2030 signals this isn’t a pilot.

🏛 Policy

  • A capital injection unlike anything we’ve seen. In the span of 48 hours, two governments put an order of magnitude more money behind Canadian AI.

    • Federal: Budget 2025 received royal assent. The $1B Venture and Growth Capital Catalyst Initiative was detailed: $700M funds-of-funds stream, $200M life sciences stream, $100M emerging fund managers stream. Plus $750M for early-stage funding gaps. That $1.75B is roughly 4x the previous VCCI allocation.

    • Ontario: The provincial budget launched the $4B “Protect Ontario Account Investment Fund” targeting AI, defence, advanced manufacturing, life sciences, and critical minerals. A private-sector asset manager will be selected to run it.

    • Both are explicitly pushing pension funds and private capital to match. We’re talking about a step change in capital going into the Canadian innovation economy over the next few years. It’s an extraordinary moment. Good time to be building in Canada.

  • FCAC released the final report from the second Financial Industry Forum on Artificial Intelligence (FIFAI 2). Four workshops, 170+ financial ecosystem members, covering consumer protection, cybersecurity, financial crime, and stability.

    • The report emphasizes that consumers benefit from AI only when financial well-being and consumer protection are embedded into governance frameworks, with institutions remaining accountable for AI-driven outcomes.

    • My take: fintech doesn’t get the attention it used to, drowned out by the AI wave. But I think AI represents an enormous opportunity for fintechs specifically. Fintechs have real moats: payment rails, regulatory licenses, domain expertise, proprietary data. These are structurally hard to replicate and took years to build. With the right team, it’s easier for an established fintech to adopt AI than for an AI-native outsider to replicate a fintech’s regulatory and infrastructure moats. The rails are the hard part. The AI is increasingly commoditized. Watch this space.

  • Evidence for Democracy published a review of the federal government’s AI Register, documenting over 400 instances of AI usage across 42 federal agencies.

    • The Register (launched November 2025) documents AI most commonly in governance/public services, industry/innovation, and immigration/borders/security. Flagged uses include CBSA facial recognition, AI for immigration decisions, RCMP’s “Draft One” AI for police reports, and Global Affairs’ AI-generated briefing notes.

    • Commendable transparency. And for any AI startup looking to sell into the federal government, this is a goldmine. A public map of exactly where every department is using AI, and by extension, where the gaps are.

📊 Data

  • MNP released “The Business of AI 2026”, a national Ipsos survey of 250 Canadian business leaders.

    • 91% of organizations are satisfied with their AI progress, but only 4% consider their use “transformational.” 48% describe it as “operational,” meaning gen AI in production but mostly focused on individual productivity rather than deep business model integration.

    • Translation: nearly everyone is experimenting, almost nobody has rewired their business around it yet. That 4% → something much larger is where the next wave of enterprise AI value gets created.

In brief

  • CoolIT Systems follow-up: The Logic reports that CoolIT’s 650 Calgary employees will receive cash bonuses ranging from $35,000 to $490,000 when the $4.75B USD Ecolab acquisition closes. KKR will make 15x its 2023 investment. The company is on track to double headcount and quadruple revenue versus 2023, all driven by AI data centre demand. This is what the AI boom looks like when it reaches the people who actually build things.

  • BMO at its Investor Day: expects AI to add more than $1B in pre-tax earnings by 2030. 96% of employees are already using AI company-wide. An internal chatbot searches 8,000 policy documents, delivering $4M in annual savings and a 60% reduction in help desk calls. BMO becomes the third Big Five bank to set a $1B AI target, joining RBC (Issue 2) and TD (Issue 3). CIBC and Scotiabank, your move.

  • Bell and BUZZ HPC partnered on sovereign AI infrastructure at the Bell AI Fabric facility in Merritt, BC. BUZZ HPC secured 6.5 MW of immediate GPU capacity with NVIDIA GB200 NVL72 and HGX systems. Part of Bell’s six-site B.C. supercluster. HIVE Digital Technologies (BUZZ’s parent) continues its pivot from Bitcoin mining to AI compute.

  • Shopify publicly launched Tinker, a free mobile app consolidating 100+ AI creative tools for images, video, logos, product photography, and 360° product views. Uses models from OpenAI, Google, and Anthropic. Available to anyone, not just merchants. Shopify’s AI drip campaign continues. We’ve now covered them in six out of seven issues.

  • SCALE AI announced the Canadian delegation for VivaTech 2026 (June 17–20, Paris): 74 AI/tech organizations selected from 170 applications. Canada sending 100+ organizations total for a third consecutive year. Partners include Calgary Economic Development, Desjardins, Global Affairs Canada, and Invest Ontario.

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— Raif Barbaros

]]><![CDATA[Canadian AI: $6.5B for a Calgary cooling company, another Vancouver acquisition and Canada's largest data centre to begin construction.]]>https://www.canadianai.tech/p/canadian-ai-65b-for-a-calgary-coolinghttps://www.canadianai.tech/p/canadian-ai-65b-for-a-calgary-coolingTue, 24 Mar 2026 11:03:01 GMT

Good morning! Welcome to the Canadian AI Newsletter, a weekly rundown for founders, operators and investors.

Was this forwarded to you? Subscribe below.

Subscribe now

I am Raif Barbaros, Partner at Mistral Venture Partners. Views are my own.

Follow the money this week, and it all lands in the same place: infrastructure. A $6.5 billion exit for a Calgary liquid cooling company. A $1.7 billion AI data centre near Regina, Canada's largest, with no public money involved. A sovereign AI factory in Rimouski running on 99% renewable energy. A U of T spinout raised $5.3M to build the logging layer that tracks what AI agents are actually doing (Uber's already using it.) Canadian AI is building the physical layer now. Let's get into it.

💰 Deals & Milestones

  • CoolIT Systems (Calgary) acquired by Ecolab for $4.75B USD (~$6.5B CAD), one of the largest Canadian tech exits in history.

    • KKR and Mubadala bought CoolIT for $270M USD in 2023. 17.6x return in under three years, driven entirely by the AI data centre boom.

    • CoolIT’s direct liquid cooling tech sits inside 7 of the world’s top 10 supercomputers and serves 4 of the 5 largest hyperscalers. Expected to generate ~$550M USD in sales over the next 12 months.

    • Ecolab says the deal doubles its addressable market from $5B to $10B. Close expected Q3 2026.

    • $270M to $4.75B in under three years. That’s the kind of return story that reshapes how investors think about AI-adjacent hardware.

  • Tailscale (Toronto) made its first-ever acquisition, Vancouver’s Border0, a privileged access management platform.

    • Border0’s 7-person team joins Tailscale. Founder Andree Toonk becomes Director of Engineering.

    • Tailscale expanding its Vancouver office, plans to grow from 250 to 400 employees globally.

    • CEO Avery Pennarun: growth driven partly by the “explosion of agentic AI” requiring secure network access. Canadian-on-Canadian M&A, driven by the agentic security opportunity.

  • YScope (Toronto) closed $3.9M USD ($5.3M CAD) via SAFE.

    • U of T spinout. Led by Two Small Fish Ventures (Allen Lau, Wattpad co-founder), with Snow Angels (Snowflake alumni syndicate) and U of T’s UTEST accelerator.

    • YScope’s Compressed Log Processor already powers Uber’s production logging and manages edge log processing across 1.5M+ devices. As AI agents generate exponentially more telemetry, this becomes critical infrastructure.

  • Cohere (Toronto) signed an MOU with Swedish defence giant Saab to develop AI for the GlobalEye surveillance aircraft, built on Bombardier Global 6500 airframes manufactured in Mississauga.

    • This follows a partnership with Thales Canada for Royal Canadian Navy AI announced earlier. Cohere’s defence portfolio is growing fast: Saab, Thales, Germany’s TKMS, South Korea’s Hanwha Oceans.

    • (Disclosure: Cohere is a portfolio company.)

  • Bell (Montréal) unveiled a $1.7 billion AI data centre near Regina, Saskatchewan — Canada’s largest. 300 megawatts. Part of Bell’s “AI Fabric” national initiative.

    • Built in partnership with the Saskatchewan government and George Gordon First Nation (Indigenous procurement and workforce development). Tenants include Cerebras and CoreWeave.

    • Construction starts spring 2026, first capacity early 2027. $1.3B of the $1.7B will be spent this year. Entirely private investment, no public money. Projected $12B in total economic value for Saskatchewan.

    • BCE raised its AI-powered solutions revenue target from $1.5B to $2.0B by 2028.

    • Regina as an epicentre of AI compute was not on anyone’s bingo card. The Indigenous partnership model could become a template for future builds.

  • TELUS and Fortanix launched a Confidential AI solution at the TELUS Sovereign AI Factory in Rimouski, Québec. Canada’s first fully sovereign AI factory, running on 99% renewable energy.

    • Data stays encrypted even during processing. Cryptographic proof it remains within Canadian jurisdiction. Launch customers: League (healthcare), OpenText (enterprise), Accenture.

    • A second Sovereign AI Factory is planned for Kamloops, BC. Directly addresses Solomon’s “sensitive data on foreign servers under foreign laws” concern.

  • NVIDIA hosted a dedicated “All In Canada AI Ecosystem” event during GTC week in San Jose.

    • Canadian announcements at GTC: Cohere building custom LLMs for NVIDIA’s latest architecture. Kepler Communications revealing on-orbit compute uses 40 NVIDIA Jetson Orin modules across 10 satellites. Vention launching Rapid Operator AI robotic arm. RBC Capital Markets building enterprise AI agents using NeMo and NIM microservices.

    • Enterprise AI, space, robotics, finance, and infrastructure. The breadth is the story.

🔬 Research

  • McGill study: AI systems exploit Canadian journalism without attribution.

    • Tested 2,267 Canadian news stories across ChatGPT, Gemini, Claude, and Grok. All four showed extensive knowledge of Canadian current events but failed to provide source attribution ~82% of the time.

    • When given web access, models could substitute for the original source in 54–81% of cases. A coalition of Canadian outlets (CP, Torstar, Globe and Mail, Postmedia, CBC/Radio-Canada) is suing OpenAI in Ontario court.

  • Three Alberta genomics projects land federal funding as part of a $20M nationwide investment. Machine learning is increasingly central to gene sequencing, drug discovery, and precision medicine.

🏛 Policy

  • Canada’s first-ever National Summit on AI and Culture concluded in Banff, with ~300 leaders from cultural, tech, academic, and government sectors.

    • Ministers Marc Miller and Evan Solomon announced a new Advisory Council on AI and Culture.

    • First formal federal policy structure linking AI to cultural protection. Copyright and compensation debates will intensify.

  • Minister Solomon brought the AI strategy pitch to Platform Calgary:

    • (1) Capital: expanded venture incentives, $100M commercialization fund tied to Mila and Inovia Capital, SR&ED reforms.

    • (2) Compute: $300M Public Compute Fund (heavily oversubscribed), higher incentives for Canadian-based compute.

    • (3) Customers: government becoming a meaningful customer via procurement reform, contracts to Cohere and Coveo.

  • Volatus Aerospace receives up to $320,000 in NRC-IRAP funding for its Condor XL heavy-lift autonomous drone (180 kg payload, 200 km range). One of the first visible downstream recipients of the $900M NRC Defence Industrial Strategy investment.

📊 Data

  • Snowflake/Omdia report: 77% of organizations globally have increased hiring due to AI, while 46% have seen role reductions, net positive. Canada-specific: 42% say AI has both created and eliminated jobs. ROI of $1.45 for every $1 invested. 31% already using agentic AI in production, surprisingly high.

  • KPMG report: 93% of Canadian public servants believe citizen data must be safeguarded in Canada. 94% say personal information must be stored domestically. 90% agree AI education and training investment is required. Data sovereignty isn’t just a political talking point. The people running government services want it too.

In brief

  • RBC (Toronto) says it’s ahead of schedule on AI: $5B+ annual tech investment, 950+ employees at Borealis AI. ATOM serves 1.3M monthly users, Lumina processes 10B transactions/minute, Aiden handles electronic trading via deep reinforcement learning.

  • 1Password (Toronto) launched a Unified Access Platform to secure AI agents in the enterprise. Discovering, auditing, and managing credentials across human, machine, and agent identities. Launch integrations with Anthropic, OpenAI, Cursor, GitHub, Vercel, and Perplexity.

  • Shopify continues its agentic AI drip campaign. Harley Finkelstein declared the company is going “all in” on agentic shopping at the Upfront Summit. The only genuinely new detail: merchants will pay OpenAI a 4% fee on ChatGPT-referred sales. We’ve covered Shopify’s agentic moves in four of five issues now — they’re flooding the zone.

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Thank you for reading! Subscribe, and please share any feedback 🙏

- Raif Barbaros

]]><![CDATA[Canadian AI: Vancouver crushing it this week, $50M from Benchmark and an acquisition.]]>https://www.canadianai.tech/p/canadian-ai-vancouver-crushing-ithttps://www.canadianai.tech/p/canadian-ai-vancouver-crushing-itTue, 17 Mar 2026 10:31:37 GMT

Good morning! Welcome to the Canadian AI Newsletter, a weekly rundown for founders, operators and investors.

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I am Raif Barbaros, Partner at Mistral Venture Partners. Views are my own.

This week, Vancouver and AI agents take centre stage. Gumloop’s $50 million Benchmark round puts Canadian no-code automation on the global map — and the Canadian-founded startup is reopening a Vancouver office to hire Canadians who don’t want to leave. Meanwhile, as if following my tee-up from last week about vertical AI consolidation in legal tech, Legora acquired Walter one day after it raised $550M. From Shopify’s ChatGPT storefronts to Bell’s Coveo partnership, Canadian AI is embedding itself into the infrastructure layer. Let’s get into it.

💰 Deals & Milestones

  • Gumloop (Vancouver) — lands $50M from Benchmark to turn every employee into an AI agent builder

    • Series B led by Everett Randle (his first deal at Benchmark); Nexus VP, First Round, YC, BoxGroup, and Shopify participated

    • Currently 24 employees — reopening Vancouver office to hire Canadians

    • Customers include Shopify, Ramp, Gusto, Samsara, Instacart, and Opendoor

    • Competition: Zapier, n8n, Dust, Anthropic’s Claude Cowork

  • Walter (Vancouver) — acquired by Legora as legaltech sector consolidation intensifies

    • Acquired one day after Legora secured $550M USD at $5.5B valuation

    • Founded 2022 by serial entrepreneur Ryan Wilson (originally Minutebook) — developed AI agent for lawyers integrating with Outlook and iManage

    • Legora CEO Max Junestrand: “We immediately recognized a shared philosophy around agent-native design”

    • Context: Follows the vertical AI consolidation pattern we flagged last week with Spellbook — legal AI point solutions becoming acquisition targets as the market matures

  • Femtum (Quebec City) — closes $16M financing round

    • Develops AI-powered predictive maintenance for manufacturing equipment

    • Quebec City’s growing industrial AI cluster attracting serious capital

  • Google for Startups Accelerator: Canada Cohort — 14 AI-driven startups selected for 2026 program

    • Geographic diversity: Vancouver, Victoria, Calgary, Kitchener-Waterloo, Toronto, Montreal, Quebec City, and first-time inclusion of Sudbury

    • Waive Medical (Sudbury), founded by Shreyansh Anand, automates clinic paperwork using AI — backed by Sudbury Catalyst Fund and FedNor

    • 145 Canadian startups supported since program launched in 2020

  • Shopify — purchases coming to ChatGPT through agentic storefronts

    • Buyers can find Shopify products and complete purchases inside ChatGPT starting late March

    • Shift from native Instant Checkout to merchant-owned storefront completion (in-app browser or separate tab)

    • Transactions still run through Shopify infrastructure; orders appear in Shopify admin

  • HCLTech (Calgary) — opens AI Collaboration Centre

    • India-based IT giant establishing centre amid recent Canada-India trade deal

    • 30 AI experts expected to work out of downtown Calgary office

    • Calgary continues attracting global tech investment

  • Celestica (Toronto) — jumps 7.2% on raised 2026 targets and hyperscaler design wins

    • TPU server assembly and AI-optimized networking racks with advanced cooling

    • White-box solutions for hyperscalers (Google, Amazon, Meta) bypassing branded equipment

    • Toronto manufacturing playing critical role in global AI infrastructure buildout

🏛️ Policy

  • “Canada could still win the AI race” — NSERC President and U of T CS director make the case

    • Alejandro Adem and David Liu argue for anchor firms, sovereign compute, and talent retention

    • “Stability and quality of life are magnets for global talent”

    • The research-to-commercialization pipeline needs intentional investment

  • Manitoba — announces provincial AI framework

    • One of the first concrete provincial AI regulation proposals in Canada

    • Suggests template for other provinces to follow

    • Possible outcome: age limits for AI access; follows similar moves in Australia, Indonesia

🔬 Research

📊 Data

In brief

📅 Upcoming Events

Thank you for reading! Subscribe, and please share any feedback 🙏

— Raif Barbaros

]]><![CDATA[Canadian AI: Signs of vertical AI consolidation, and our love of robots and drones.]]>https://www.canadianai.tech/p/canadian-ai-signs-of-vertical-aihttps://www.canadianai.tech/p/canadian-ai-signs-of-vertical-aiTue, 10 Mar 2026 11:00:38 GMT

Good morning! Welcome to the Canadian AI Newsletter, a weekly rundown for founders, operators and investors.

Was this forwarded to you? Subscribe below.

Subscribe now

The Canadian AI Newsletter is written by Raif Barbaros, Partner at Mistral Venture Partners. Views are my own.

This week, the tension between AI opportunity and accountability came into sharp focus. OpenAI’s summit with Minister Evan Solomon produced commitments on safety reporting and Canadian context training — but the Globe’s call for “National AI” raises a deeper question about whether sovereign compute should mean sovereign control. Meanwhile, vertical AI players like Spellbook and NationGraph are hitting scale ($100M ARR and $18M raises respectively), while defence AI is having a moment with Dominion Dynamics’ $50M sovereign wingman pledge and Kraken’s $615M acquisition. From Atlantic Canada ($8.5M for 40 projects) to UofT’s AMD partnership, the infrastructure layer is getting real. Let’s get into it.

💰 Deals & Milestones

  • Spellbook (Toronto) — on track to hit $100M USD ARR, partners with Canadian Bar Association

    • Secured $40M USD debt facility from RBCx to acquire 5+ smaller legal AI competitors over two years — the vertical AI market is maturing fast and weaker players are becoming acquisition targets. CEO Scott Stevenson: “Once every two weeks, we hear from a company looking to get acquired”

    • Tripled revenue in the past year; plans to grow team from 150 to almost 300 by year-end

    • Two-year exclusive partnership with CBA makes Spellbook available to 40,000+ Canadian legal professionals at discount

  • NationGraph (San Francisco/Toronto/Miami) — raises $18M USD Series A to bring AI to government contracting

    • Menlo Ventures led; total funding now $22.5M USD

    • AI procurement intelligence platform surfaces data across 90,000+ US government buyers — past purchases, key contacts, budget timelines

    • Automates FOIA requests for data not publicly available

    • Canadian-founded; part of the new generation of AI-native intel startups building on LLM infrastructure

  • Kraken Robotics (St. John’s) — dives deeper into defence with $615M Covelya Group acquisition

    • Expands underwater robotics and seabed intelligence capabilities

    • Defence AI sector seeing significant consolidation as Canada increases commitments

  • Landing Zones Canada (Medicine Hat, Alberta) — receives PrairiesCan funding for AI-enabled drones

    • Federal support to revolutionize atmospheric weather sampling with autonomous drones

    • Alberta’s aerospace/defence cluster continues to attract government backing

  • Atlantic Canada — Ottawa puts $8.5M behind 40 Atlantic Canadian AI projects

    • Minister Solomon announced funding to help businesses adopt AI and scale operations

    • Spread across multiple provinces and sectors

  • Dominion Dynamics (Ottawa) — commits $50M to build “sovereign autonomous wingman”

    • ACP (Autonomous Collaborative Platform) designed to fly alongside crewed fighters in high-risk areas

    • CEO Eliot Pence: “Canada shouldn’t just buy that future from others. We should build it, and we will build it.”

    • Company has raised $26M to date; positioning as explicitly Canadian competitor to Lockheed Martin/Raytheon

    • Arctic operations capability a key differentiator

  • TELUS (Vancouver) — targets $2B in AI revenue by 2028

    • CEO’s parting shot to investors as he heads off to retirement: AI revenue trajectory is the metric to watch

    • Significant enterprise AI ambition from telecom incumbent

📊 Data

  • The Globe and Mail: How Canadian companies are putting AI to work

    • Survey of enterprise AI adoption across Canadian industries.

    • Shopify has grown its revenue without adding a single net new hire in two years. CIBC has saved one million work hours.

    • Study implies some layoffs or hiring freezes due to the adoption of AI. Buyer beware of instances of AI washing. Companies that overhired during ZIRP or face margin pressure instead frame layoffs as “AI transformation” — earning stock pops and analyst upgrades. Once enough adopt this framing, not invoking AI will become a negative signal, so even companies not adopting AI will resort to layoffs to buy the perception. It’s the corporate equivalent of buying a Peloton, posting it on Instagram, and never riding it.

🏛️ Policy

  • OpenAI and Ottawa: Post-Tumbler Ridge Update

    • Minister Evan Solomon met with OpenAI CEO Sam Altman and senior leadership following revelations that the Tumbler Ridge shooter’s ChatGPT interactions—including gun-violence chats—had been flagged internally, but employees were rebuffed when attempting to alert law enforcement. The company had banned the shooter’s account months before the tragedy, but never notified Canadian authorities.

    • Commitments extracted from OpenAI include:

      • New safety reporting protocols for violent ideation

      • 24-hour timeline for law enforcement referrals when violent intent is detected

      • Provision of Canadian context training data for models

      • Direct apology to the Tumbler Ridge community

  • But the Globe’s “National AI” op-ed argues these don’t go far enough—calling for public AI infrastructure rather than relying on American Big Tech. The $2-billion Sovereign AI Compute Strategy is now being questioned: will value flow to Canadian companies and citizens, or simply become a passthrough to U.S. tech giants?

  • CTV: Quebec electoral officer calls for better legislative oversight on AI

    • Practical example of AI impact on critical democratic processes

    • Electoral integrity concerns as AI tools become more sophisticated

  • The Narwhal: Alberta regulator rejects Canada’s largest data centre

    • Synapse Data Centre’s $10B project for Olds denied by Alberta Utilities Commission

    • Would have consumed as much power daily as the entire city of Edmonton via 1.4 gigawatt natural gas plant

    • Regulator cited “errors, insufficient or incomplete information and internal inconsistency” — turns out the application had significant holes and misrepresentations, with public consultation starting only 14 days before submission

  • National Observer: Mapped — Ontario towns and cities with data centre proposals

    • Complete picture of Ontario’s data centre pipeline across municipalities.

    • Transparency matters, and having this mapped is the right idea for tracking sovereign compute buildout. Should not require heroic efforts by a journalist or researcher.

  • Manitoba announces AI framework

    • Provincial approach to AI governance and adoption

🔬 Research

  • Canada advances 6G security and resilience at Mobile World Congress

    • Canada among global partners establishing 6G security frameworks

    • 6G and AI are co-evolving: AI will optimize 6G networks from physical layer up (replacing traditional signal processing with ML models), while 6G will be purpose-built to carry AI traffic — pushing inference to the edge and serving as connective infrastructure for autonomous systems, AI agents, and physical AI. Before you get too excited, timeline: 2030.

  • U of T and AMD launch dedicated AI and computing research lab

    • AMD investing in 100 research projects over 3 years

    • Focus areas: energy-efficient AI systems, enterprise-scale data intelligence, decentralized training across distributed clusters

    • UofT joins Carnegie Mellon, ETH Zurich, NUS in AMD’s global R&D network

    • AMD donating two state-of-the-art AI servers to the lab

  • CIFAR and MITACS partner to attract top next-gen talent to Canada

    • Joint initiative to bring AI researchers to Canadian institutions

    • Ten $170K awards

  • India-Canada AI collaboration — McGill and UofT establish AI education and research initiatives

    • Part of the new Canada-India trade deal

    • McGill: AI education and research programs

    • UofT: AI and health collaboration

    • Academic diplomacy as soft power

In brief

📅 Upcoming Events

Thank you for reading! Subscribe, and please share any feedback 🙏

— Raif Barbaros

]]><![CDATA[Canadian AI: From Painting Robots to "Wise" AI, the Immense Range of Canadian AI]]>https://www.canadianai.tech/p/canadian-ai-from-painting-robotshttps://www.canadianai.tech/p/canadian-ai-from-painting-robotsTue, 03 Mar 2026 13:00:08 GMT

Good morning! Welcome to the Canadian AI Newsletter, a weekly roundup for founders, operators and investors.

Was this forwarded to you? Subscribe below.

Subscribe now

The Canadian AI Newsletter is written by Raif Barbaros, Partner at Mistral Venture Partners. Views are my own.

This was the week Canadian AI showed its range — from SMS agents cutting insurance quotes to 3 minutes, to robots blasting paint in Vancouver shipyards, to a Waterloo researcher asking whether we can teach AI to be wise, not just smart. Meanwhile, Ottawa’s confrontation with OpenAI over the Tumbler Ridge tragedy continues to escalate. Alberta and Quebec are drawing different battle lines on how to power the AI infrastructure boom with data centres. Let’s get into it.

💰 Deals & Milestones

  • General Magic (Toronto) raised $7.2M USD to enable insurance quotes via SMS in 3 minutes instead of 30.

    • Led by Radical Ventures with a16z Speedrun, Figma VP Brendan O’Driscoll, OpenAI’s Larry James Erwin, and Cohere CEO Aidan Gomez are pitching in.

    • The playbook: find a regulated vertical where incumbents are slow, automate the friction, and don’t require customers to download anything.

  • JetScale AI (Montréal), founded by ex-Dataperformers founders Mehdi Merai and Gabriel De Lisi, secured $5.4M in seed funding.

    • Cloud infrastructure accounts for 3-4% of global GHG emissions — matching aviation.

    • JetScale is building AI-powered optimization software that reduces both cloud spend and emissions.

    • Co-led by BDC’s Seed Venture Fund and Diagram’s ClimateTech Fund.

  • PeerSupport.io (Whitehorse) secured a deployment with the Yukon government for its voice-activated AI browser for medical referrals.

    • 10.5 hours saved per week per clinician.

    • Launching a $5,000 “North of 60” scholarship for healthcare workers in the territories.

    • By end 2026: supporting 1M+ patient files across 5 major providers

  • Augure launched a sovereign Canadian AI platform hosted exclusively on OVHcloud’s Montreal data centres.

    • No US CLOUD Act exposure — data stays in Canada

    • The sovereignty play is becoming a real compliance moat.

    • Small team alert: spun out of an agency with 2-10 people on LinkedIn. I’ve reached out to the founder to learn more, and execution might feel a little rough, but it's promising. Tested it on Canada exports. Comparable to Gemini. Not an in-depth comparison by any means, but interesting.

    • I found the idea super interesting. As foundational models become interchangeable and open-source proliferates, we might see more “sovereign wrappers” appear.

  • Confined Space Robotics (Nisku, Alberta) won a $1.5M contract with Seaspan Shipyards in Vancouver.

    • Semiautonomous robots that handle abrasive blasting and painting in tight, dangerous spaces. The kind of work humans might be happy to give up.

    • Part of the federal national shipbuilding strategy.

    • Industrial robotics, Alberta-built, B.C.-deployed. Loving the cross-Canadian collaboration.

  • TD Bank is scaling AI through its anti-money laundering program with a $1B value target.

    • Strategy: “build once and use many times.”

    • $1B AI target. Last week we found some humour in RBC setting that same goal on ~$330B market cap. TD’s ~$220B — so, 50% more ambitious. Progress.”

  • Bitfarms converting 13 crypto mining sites — 8 of them in Quebec — to AI and high-performance computing data centres.

    • Quebec-founded, Toronto-based, NY-bound.

    • The bitcoin-to-AI pivot is happening across the sector, but Bitfarms has the Quebec energy advantage with committed power (for now).

📊 Data

🏛️ Policy

  • The OpenAI-Ottawa confrontation escalated this week.

    • AI Minister Evan Solomon summoned OpenAI’s safety team to Ottawa after revelations that the Tumbler Ridge shooter’s ChatGPT account was banned in June 2025 — but police were never notified.

    • OpenAI admitted “in hindsight” they would have reported the shooter, and revealed shooter evaded the ban with a second account.

    • Justice Minister Sean Fraser and Public Safety Minister Gary Anandasangaree are now signalling legislation if self-regulation fails.

    • The policy stakes are enormous. Canada has no AI-specific regulation on the books. Only a voluntary Code of Conduct exists. Ottawa is reportedly moving toward mandatory 24-hour reporting of violent ideation, with formal legislation potentially tabled by April.

    • Evan Solomon is scheduled to meet with Sam Altman next.

  • The provincial data centre divergence: Alberta vs Quebec.

    • Alberta: $10-billion AI data centre proposed in Olds (population 9,679) with a 1.4 gigawatt natural gas power plant — the second-largest in the province — as part of its push to attract $100B in data centre investment by decade’s end. Highly recommend reading, simply fascinating to think of such a small town with such a large data centre.

    • Quebec: Hydro-Québec proposes doubling rates for large data centres from ~6.5¢/kWh to ~13¢/kWh for facilities consuming >5MW annually

    • Most observers framed Quebec’s move as anti-development. But context matters: Quebec has among the lowest electricity rates in North America thanks to its public hydro resources. The proposed 13¢/kWh brings large data centres in line with North American norms — including Ontario — while individuals and smaller businesses keep the low rates. Two provinces, two approaches to powering the AI boom. I think they will both benefit greatly.

🔬 Research

  • University of Waterloo researchers led by Dr. Sam Johnson published the first study proposing to train LLMs in “wise reasoning.”

    • Teaching AI to recognize the limits of its knowledge and adapt to uncertainty — metacognition and intellectual humility.

    • Published in Trends in Cognitive Sciences.

    • New architectures and benchmarks for measuring AI wisdom.

    • It’s a fundamentally different approach to AI safety than just adding guardrails.

    • “If the smartest person in the world were a toddler, we still wouldn’t hand them the nuclear codes. AI is increasingly resembling a child genius, still needing a healthy dose of wisdom from its human parents.”

  • U of T’s Schmidt AI Fellows gathered for a Foundation Models for Science workshop.

  • Cipher AI, led by a University of Regina professor, is a Canadian-developed disinformation detection system.

In brief

• HEALWELL AI (TSX: AIDX) announced its first Middle East contract — a deployment with a major governmental health system. Canadian healthcare AI going global.

• U of T Desjardins Startup Prize — March 5 pitch competition, 10 finalists competing for $100,000. Early signal on which AI verticals are attracting founder talent.

Thank you for reading! Subscribe, and please share any feedback 🙏

— Raif Barbaros

]]><![CDATA[Canadian AI: Taalas and LawZero raising $100M+ each]]>https://www.canadianai.tech/p/canadian-ai-taalas-and-lawzero-raisinghttps://www.canadianai.tech/p/canadian-ai-taalas-and-lawzero-raisingTue, 24 Feb 2026 13:03:28 GMT

Good morning! Welcome to the Canadian AI Newsletter, a weekly roundup for founders, operators and investors.

Was this forwarded to you? Subscribe below.

Subscribe now

The Canadian AI Newsletter is written by Raif Barbaros, Partner at Mistral Venture Partners. Views are my own.

This was the week a Toronto chip startup nobody had heard of raised more than most Series B rounds. Taalas pulled in $169M to hardwire AI models directly into silicon — the kind of deep tech bet Canada rarely makes at this scale. Cohere shipped a multilingual model that runs on your phone in 70+ languages. Robots showed up too, in Montréal labs, on Ontario corn fields, and underground in Sudbury mines. Let’s get into it.

💰 Deals & Milestones

  • Taalas (Toronto) raised $169M to build model-specific AI chips that hardwire inference directly into silicon.

    • Founded by Ljubisa Bajic (Tenstorrent co-founder). Team of 25 engineers from AMD, Apple, Google, Nvidia.

    • First chip (HC1) runs Llama 3.1 8B at 17,000 tokens/sec — 73x faster than Nvidia’s H200 at 1/10th the power.

    • Partners with TSMC on a two-month chip turnaround vs. ~six months for a standard AI processor. Plans to handle frontier models by year-end.

    • Backers include Quiet Capital, Fidelity, and chip industry VC Pierre Lamond. Total raised now $219M.

  • LawZero (Montréal) — Ottawa signed a letter of intent to invest more than $100M in Yoshua Bengio’s AI safety non-profit.

    • LawZero is building actual AI models and technical solutions for safe, trustworthy AI. Bengio: “This is not a university project, but something that’s pushing the frontier of AI.”

    • Barely a year old, ~30 employees, plans to top 100 next year. Had launched with US$30M in funding. Most of the new capital goes to compute.

    • Minister Solomon: “This is a bet we want to make. We want to support Canadian tech.” One of the largest federal AI investments since the $240M to Cohere.

  • Haply Robotics (Montréal) raised $16M CAD to build haptic control systems for physical AI.

    • 150+ customers, including 30 Fortune 500 companies. Revenue growing 150% YoY. Won CES 2026 awards.

    • CEO Colin Gallacher: “There are going to be 10 billion robots on the planet by 2050. They’re going to need steering wheels.”

    • Led by Sound Media Ventures. Amazon Industrial Innovation Fund, Hanwha, Two Small Fish Ventures, BDC Capital Deep Tech, all in.

  • Shakudo (Toronto) raised $7M USD for its AI deployment platform for regulated industries.

    • Series A2 Round led by Wittington Ventures, family office of the Weston family, owners of Loblaw and Shoppers Drug Mart. Loblaw is a customer. Shakudo had raised a $7M in a Series-A in 2023.

  • Upside Robotics (Waterloo) raised $7.5M seed for autonomous farming robots that deliver precision fertilizer to crops.

    • 10,000+ autonomous km logged, 100,000+ litres of fertilizer applied. Cuts fertilizer use by 70%, saving farmers ~$150/acre/season. 200 farms on the waitlist.

    • Led by Plural with Garage Capital and the founders of Clearpath Robotics.

  • Toyo raised $4.3M seed for an agent-native platform that replaces SaaS tools with AI agents for founders.

    • Led by Frontline Ventures with iNovia Capital, Tiny Supercomputer, and angels from Amazon, Microsoft, Cloudflare.

    • Serial founders. Previous exits include Pusher (to MessageBird) and MediaCore (to Workday).

  • LoopX (Sudbury) received a $480K FedNor grant to commercialize generative AI analytics for mining.

    • Real-time decision-making and operational awareness underground. AI in the resource economy, the kind of story nobody else covers.

  • Cohere (Toronto) launched Tiny Aya, a family of open-weight multilingual models supporting 70+ languages.

    • 3.35B parameters. Runs on a laptop offline. Regional variants for Africa, South Asia, Asia-Pacific. Launched at the India AI Summit — a strategic play for the next billion users outside the English-speaking world.

    • (Disclosure: Cohere is a portfolio company.)

  • RBC created a new AI Group reporting directly to the CEO, targeting $1B in enterprise value from AI by 2027. Given their market cap of $300B+, not the most ambitious of aspirations, but whatevs.

    • Also partnering with Cohere on North for Banking, foundational enterprise AI models for financial services.

  • Shopify launched its Winter ‘26 Edition, its twice-yearly product release: it was about agents, agents, and, also, agents.

    • Products now surface directly inside AI conversations on ChatGPT, Perplexity, and Microsoft Copilot. One setup, every agent.

    • Tobi Lütke: “We’re making every Shopify store agent-ready by default.”

    • Ben Thompson called Shopify “one of the biggest winners from AI.”

🏛️ Policy

  • Minister Evan Solomon’s three-continent diplomatic tour. Solomon hit Munich, New Delhi, and Washington in a single week — signing the Canada-Germany Sovereign Technology Alliance, attending the India AI Summit, and meeting US counterparts. The most active week of AI diplomacy Canada has had in years.

  • Bank of Canada’s Carolyn Rogers told businesses to take a leap of faith on AI at the Rotman Productivity Conference — invest now or get left behind.

    • BMO chief economist Douglas Porter responded by calling AI productivity gains overhyped, arguing that Canada’s productivity crisis is the norm, not new, and that the internet didn’t deliver the boosts people assumed it would either.

    • So the gov’t rep is urging businesses to be aggressive and take a leap of faith, while the private-sector economist is telling them to be conservative. 🤦‍♂️

🔬 Research

  • Geoffrey Hinton gave a long-form interview to CBC Ideas (Feb 18) arguing AI needs to develop “maternal instincts” — caring for humans the way a mother cares for a child — rather than being designed as a submissive assistant. His framing: “If it’s not going to parent me, it’s going to replace me.”

  • Yoshua Bengio told Business Standard at the India AI Summit, “Forget AGI if AI models stay inconsistent with jagged skills.” The definition of AGI and the degree of jaggedness it can exhibit is really at the heart of this question. For what it’s worth, humans are pretty jagged in their intelligence, too.

  • Vector Institute hosted its third annual Remarkable conference (Feb 19-20) featuring Cohere co-founder Nick Frosst as a Day 1 speaker, alongside researchers from Google DeepMind, Thomson Reuters, and the Acceleration Consortium. Also released its MIDST privacy paper — a practical framework for deploying differential privacy in production ML pipelines.

📊 Data

  • TELUS cross-border AI report: 85% of Canadians are using AI. 90% believe AI should be regulated. Similar numbers in the US. 11,000+ surveyed.

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Canadian AI Newsletter
Canada's AI ecosystem in 5 minutes
By Raif Barbaros

Have a great week! See ya 👋

]]><![CDATA[Canadian AI: Apple Goes Shopping in Waterloo]]>https://www.canadianai.tech/p/canadian-ai-apple-goes-shopping-in-waterloohttps://www.canadianai.tech/p/canadian-ai-apple-goes-shopping-in-waterlooMon, 16 Feb 2026 17:59:49 GMT

First issue, welcome! Great week in Canadian AI. Apple goes shopping in Waterloo. Accel-led pre-seed round in Toronto. Cohere making mint. Loblaw is plugging groceries into ChatGPT. A Canadian startup solving AI memory.

💰 Deals & Milestones

  • Apple quietly acquired Kuzu (Waterloo), a graph database startup founded by UWaterloo CS professor Semih Salihoğlu.

    • Deal closed in October 2025, surfaced this week via EU Digital Markets Act disclosure. ~10 person team. Terms undisclosed.

    • Built an embedded graph database for query speed and scalability — open source under MIT license. Website and GitHub now dark.

    • Apple’s second Kitchener-Waterloo acquisition since DarwinAI in 2024, which brought on-device visual inspection AI to Apple Intelligence. Waterloo keeps graduating startups straight into Big Tech.

  • Modem (Toronto) closed a $4.4M USD pre-seed led by Accel with Inovia.

    • Founded by Ben Vinegar, former VP Eng at Sentry. Angels include Cohere co-founder Ivan Zhang.

    • AI product management — helping dev teams manage context as AI speeds up shipping.

  • Cohere (Toronto) According to CNBC, hit ~$240M ARR.

    • CNBC obtained a February investor memo: 50%+ QoQ growth throughout 2025. Gross margins ~70%.

    • SAP integrating Cohere’s North agentic platform into its Sovereign Cloud ERP for public sector and regulated industries in Canada.

    • (Disclosure: Cohere is a portfolio company.)

  • Shopify Q4: revenue up 31% to $3.67B. GMV hit a record $123.8B. Announced $2B share buyback.

    • Orders from AI search queries rose 15-fold since January 2025. Signed GM, L’Oréal, Balenciaga.

    • Harley Finkelstein: “The AI era has now reached commerce.”

  • Loblaw partnering with OpenAI to integrate PC Express into ChatGPT.

    • Ask ChatGPT for a recipe, add ingredients to your cart, check out for pickup or delivery. First grocery retailer to build this.

    • Lauren Steinberg of Loblaw: “Rather than asking Canadians to change their behaviour, we’ll adapt to it.”

  • Backboard.io (Ottawa) became the first platform to lead both major AI memory benchmarks.

    • Founded by Assent co-founder Rob Imbeault. Solving AI amnesia, portable memory across LLMs and sessions. 93.4% accuracy on LongMemEval and 90.1% on LoCoMo.

    • (Disclosure: Pre-seed led by yours truly.)

📊 Data

  • Meta / Linux Foundation report: AI could add 9% to Canada’s GDP by 2035. Only 26% of orgs have fully implemented AI.

  • CMA survey: half of Canadians are using AI for medical advice. Only 27% trust it for accuracy — but they’re using it anyway.

🏛️ Policy

  • Canada’s AI Task Force — backlash and ripples from the government’s recommendations continue.

    • 350 pages, 28 members, 32 reports. Consistent diagnosis: leads in research, lags in commercialization, no domestic compute.

    • Then comes a take down of the methodology.

    • Then an insider’s take: “The diagnosis is consistent, but the prescriptions are not.”

    • My take: Call me Mr. Glass Half Full, at least the gov’t’s talking about it and trying. Two years ago, they weren’t.

  • Canada and Germany signed a joint AI declaration and launched the Sovereign Technology Alliance.

    • Focus: expand secure compute infrastructure, accelerate AI commercialization, strengthen talent pipelines.

    • The declaration flagged Yoshua Bengio’s LawZero as a potential area for cooperation on safe-by-design AI.

In brief

  • Angelica Lim, Canada CIFAR AI Chair at SFU, profiled by CBC for her work teaching robots to read human body language and facial expressions. Previously led the emotion team on SoftBank’s Pepper robot.

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