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.

The sovereign-compute conversation finally moved from press releases to procurement this week. Bell, Cohere, Hypertec, and BUZZ HPC put US$220M behind 2,304 NVIDIA Grace Blackwells in Merritt, BC, the most concrete answer yet to the question of where Canadian AI actually runs. In the same seven days, Shopify made AI shopping agents the default checkout path with its Spring ‘26 edition, Cohere tripled its UK footprint just before US export controls on Anthropic created what its team is calling “huge inbound,” and Clio paired a sixty-five-day legal-AI training blitz with a quiet Canadian-data acquisition that gives away the strategy. Around it: an $8-10B Qualcomm rumour around Toronto’s Tenstorrent, two same-day robotics partnerships out of Montréal’s Vention, and a New Brunswick crop-spectroscopy seed round that keeps making the case for AI beyond the Toronto-Montréal corridor. Let’s get into it.

💰 Deals & Milestones

• Picketa Systems (Fredericton) closed a $2.1M seed round led by Tall Grass Ventures to put ML-driven crop nutrient sensing into farmers’ hands.

  • The company’s LENS device uses spectroscopy and machine learning to translate light readings into nutrient concentrations in seconds, on the field, with no lab turnaround. Today’s standard is to mail a tissue sample and wait days for a result that may already be stale.

  • Atlantic Canada agtech with a real ML stack and a hardware moat. Geographic diversity outside Toronto and Montréal is one of the under-priced edges in Canadian venture.

• Reveal Life Science (Montréal) won the OVHcloud Startup Challenge at VivaTech in Paris.

  • The surgical-AI startup uses Raman spectroscopy combined with large molecular datasets to identify cancerous tissue intra-operatively in seconds, with data hosted on Canadian infrastructure via Qohash.

• Vention (Montréal) announced two physical-AI partnerships on the same day at Automate 2026 in Chicago.

  • The first brings FANUC America’s industrial robots onto Vention’s AI-driven hardware and software stack, including AI programming, digital twin, and collision-free path planning on NVIDIA Isaac. The second is a digital-twin collaboration with Teradyne Robotics optimized for Universal Robots cobots, with AI bin-picking via Rapid Operator AI.

  • These are separate from Vention’s Series D from earlier in the year and should not be conflated. Read together, Vention is positioning itself as the AI control plane that sits above a fragmented robotics hardware market, not as a vendor competing inside it. That is a smarter wedge.

• BrokerPlus (Toronto) launched out of stealth with more than CAD $500K in pre-seed funding to bring AI to the mortgage broker channel.

  • Backers include Michael Hyatt’s family office, Cowie Capital, Tennr’s Trey Holterman, and Bet99’s Jared Beber. The product uses AI to mine broker management systems for missed renewal and refinance opportunities within brokerages’ own client databases. Founders are CEO Swish Goswami, previously of Surf, and CTO Amir Agassi.

🏢 Large Companies

• Bell AI Fabric, Cohere, Hypertec, and BUZZ HPC announced a landmark sovereign-AI compute deal to host Cohere’s foundation models on fully Canadian infrastructure. (Disclosure: Cohere is a Mistral Venture Partners portfolio company.)

  • The numbers: 2,304 NVIDIA Grace Blackwell GPUs (GB200 NVL72, liquid-cooled, InfiniBand), a USD $220M three-year commitment routed through HIVE’s BUZZ HPC subsidiary, hosted at Bell’s 6.5 MW facility in Merritt, BC, with delivery targeted for late 2026 into early 2027.

  • A Canadian foundation-model company running its own models on Canadian-owned compute, sitting on Canadian power, under Canadian jurisdiction, with one of the country’s largest carriers operating the fabric.

  • Worth a flag: this is a private-sector deal, not a Sovereign AI Compute Infrastructure (SCIP) grant. SCIP is federal money trying to bootstrap supply; this is private demand finally showing up to meet it. The SCIP grants will come in the months ahead.

  • Also distinct from Bell’s larger 300 MW Saskatchewan project announced earlier this year. Merritt is the one with the customer attached.

• Shopify (Ottawa) shipped its Spring ‘26 Edition with 150+ updates that make agentic commerce the default.

  • The headline change is the Universal Commerce Protocol (UCP), now on by default across every Shopify store, which lets AI shopping agents like ChatGPT, Copilot, and Perplexity read catalogs, build carts, and complete checkout on the buyer’s behalf. There is also a new “Agentic” admin section in every store, an expanded Sidekick that now reaches into the admin and POS, and a stack of merchant-side AI tooling.

• Cohere (Toronto) tripled its UK footprint with a new ~14,000 sq ft office at 100 New Oxford Street in London, capacity for up to 100 people.

  • Aidan Gomez framed the move squarely around the UK’s sovereign-AI push. Read together with the Merritt deal and the inbound interest in the In Brief section below, the picture is clear: every Western democracy that is uncomfortable with depending on a single American or Chinese lab is now a Cohere prospect, and the company is putting boots on the ground in those with the largest budgets.

• TELUS Digital (Vancouver) was named a preferred implementation partner by ElevenLabs for ElevenAgents, its enterprise voice-agent platform.

  • TELUS Digital takes the lead on implementation, integration, governance, and managed services for enterprise CX customers deploying ElevenAgents. The release cites more than 90,000 simulations run through its Fuel iX Agent Trainer and a 20% reduction in onboarding time for live agents trained alongside AI.

  • The hidden story in enterprise voice AI is that the model is rarely the bottleneck; integration into a customer’s CRM, telephony, compliance, and ops is. ElevenLabs is the best voice model team in the world. They do not want to be a service business. TELUS Digital has the implementation muscle, the CX accounts, and an existing AI platform to plug into.

• Tenstorrent (Toronto) is reportedly in advanced acquisition talks with Qualcomm, at a rumoured price of US$8-10B.

  • The Information broke it; Reuters echoed the outline. No party has confirmed and the deal is not closed. If the reporting is accurate, the price is roughly a 4x premium on Tenstorrent’s end-2025 ~$2.6B mark and would be one of the largest acquisitions ever for a Toronto-headquartered company. Jim Keller, the AI silicon legend who runs Tenstorrent, would in this scenario land inside Qualcomm.

  • Watch Qualcomm’s June 24 Investor Day. If true, the Canadian AI hardware story instantly looks different: the open-source RISC-V challenger to NVIDIA is suddenly an arm of a US public chipmaker, and the talent and IP question becomes whether Tenstorrent’s Toronto engineering team stays Toronto-based or gets gradually absorbed into a San Diego org chart.

• Clio (Burnaby) launched the Legal AI Accelerator, its largest-ever legal-AI training push, aimed at certifying 25,000 legal professionals by ClioCon in Boston this October.

  • The Accelerator opened June 15 and runs 65 days of guided practice, CLE-eligible sessions, three no-cost certifications, and a tour of Clio Connects events across multiple US cities. Free to participate.

  • The training blitz lands days after Clio’s June 10 acquisition of Canadian legal-data company Jurisage (470,000+ Canadian cases across 40+ courts, updated daily), which clears the way for Clio Work to launch in Canada later this year. Read together, the strategy is obvious, and it is the right one. In vertical AI, proprietary data is one of the few durable moats against the big labs. Clio is not trying to out-scale frontier model builders; it is locking up the trusted, jurisdiction-specific legal data and the practitioner workflows that general-purpose models cannot easily replicate, then training the entire market to run on its platform.

🔬 Research

• Giesecke+Devrient launched its AI Hub embedded inside Mila, positioning Montréal as the heart of its global AI Center of Excellence.

  • The German SecurityTech group will invest $80M over five years to develop applied AI for cybersecurity, fintech, and digital identity from inside Mila’s Montréal facility. Another global institution choosing to put applied-AI work next to Yoshua Bengio’s lab instead of inside its own corporate R&D centre. The Mila gravity well keeps working.

🏛️ Policy

• Alberta Innovates committed $14M to commercialize local technology, with AI startups among the beneficiaries.

  • The provincial program is general-tech rather than AI-exclusive, so the AI-specific share will be smaller than the headline number suggests, but the direction matters. Alberta keeps showing up on the deployment side of the AI strategy.

• MLT Aikins published Volume Two of its AI data centre legal and regulatory guide covering the physical side of building data centres in Canada.

  • The guide walks through corporate structuring, financing, Investment Canada Act and foreign-investment review, energy and grid considerations, land use, environmental permitting, and Indigenous consultation. A useful operator’s-eye companion. If you are thinking about where the next Merritt-class facility gets built, this is the playbook for what stops it.

• James Moore argued in a CTV op-ed that healthcare, and specifically rare-disease diagnosis, is Canada’s largest under-claimed AI opportunity.

  • The former federal industry minister set the argument against the national AI strategy: Canada has the data, the publicly funded health system, and the research base; what it lacks is the procurement runway to put diagnostic AI into clinics at scale. Worth reading not for the conclusion, which is familiar, but for the framing from someone who has actually sat in the cabinet seat where these decisions get made.

📊 Data

• National Bank of Canada / Leger released a survey on AI’s role in Canadian purchasing on June 19.

  • 39% of Canadians say they used generative AI to support a purchase in the past year, 61% say AI now sways them more than advertising, and Quebec leads adoption at 45% (Ontario at 41%, Manitoba and Saskatchewan tied at the bottom at 28%).

  • Stitch this to Shopify’s Spring ‘26 release above. If 61% of Canadian buyers already trust AI more than ads, and the world’s largest commerce platform just made agentic checkout the default, that is supply meeting demand on the same week.

📰 In brief

• Cohere is reporting huge inbound from US allies after Washington’s export controls on Anthropic disabled the Fable 5 and Mythos 5 models in several allied markets. Gomez and President Joelle Pineau told Bloomberg the diversification calls have picked up sharply; Prime Minister Carney referenced the same dependency dynamic in a separate appearance the same week.

• Cohere’s Nick Frosst sat down with BetaKit for a wide-ranging interview on sovereign AI recorded during Toronto Tech Week, before the Anthropic export news broke. The line that lands: if your whole stack comes from one country that can switch you off, that is not a foundation you can build on.

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

— Raif

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.

Two themes this week: money and rules. On the money side, two new Canadian unicorns in the same seven days, both with AI as the centrepiece of their pitch, Toronto’s Beacon at a $1.4B valuation and Montréal’s nesto at $1.47B, with a Calgary-rooted manufacturing-vision raise and a tidy Toronto fintech pre-seed alongside. On the rules side, Ottawa tabled the first Canadian legislation to regulate AI head-on: one bill that puts safety duties directly on chatbot operators, another that gives you the right to make a company delete an AI deepfake of you. Add a sobering warning from a Toronto lab about what open-weight models can do in the wrong hands, and a rare look inside the GTA building where one of Canada’s most powerful supercomputers actually lives. Let’s get into it.

💰 Deals & Milestones

• Beacon (Toronto) closed a US$225M Series C that values the AI rollup at roughly $1.4B.

  • General Catalyst and HarbourVest led, with Lightspeed and Toronto’s Intrepid Growth Partners. The round is all-equity and all-primary, pushing total funding past US$550M and lifting the valuation from the $1B it carried on its US$250M Series B last November. The deal actually closed in January and was only made public this week.

  • Beacon is the “anti-private-equity” play: launched in 2024 by former Instacart president Nilam Ganenthiran, it buys small, established software companies and rebuilds them on a shared AI operating stack. It is reportedly closing roughly one acquisition a week.

  • AI rollups are a real opportunity, and Beacon is running the Constellation Software playbook with an AI engine bolted on. The thesis is that legacy software businesses are full of margin you can unlock with automation.

  • I met Nilam years ago when we negotiated the deal with Loblaw that brought Instacart to Canada. He is a super smart, all-around good human. He’s pulling in another ex-Instacart superstar, Marc Schaff, previously CTO at Instacart - getting the band back together!

• nesto (Montréal) raised a CAD $302M Series E at a CAD $1.47B valuation.

  • The round splits into $107M primary and $195M secondary, with La Caisse, Fidelity Canada, PICTON and Endeavor Catalyst coming in new, alongside returning backers Portage, Diagram, NAventures, National Bank, Fonds de solidarité FTQ and Fondaction. The company is profitable, with more than $37B in originations this year and over $80B under administration.

  • Will invest in AI to improve employee productivity and client experience.

  • Also launches its Maestro AI platform, which nesto says can underwrite a mortgage deal in under two minutes, work that has historically taken a day or more.

  • The secondary-heavy structure tells you early backers are taking real money off the table, which is a healthy sign for the Canadian fintech cap-table ecosystem.

• Maneva (Toronto) raised a US$27M Series A to put computer vision on the factory floor.

  • US Venture Partners led, with USVP’s Matt Garratt joining the board, and returning investors Bling Capital and Freestyle Capital plus Canadian firms Seguin Ventures and N49P. Total raised is now US$38.4M. CEO Rae Jeong is a former DeepMind engineer who started out as a welder in Alberta; CTO Kelvin Chan is a Magna alum.

  • The product turns a plant’s existing cameras into a real-time system that flags defects, catches safety hazards, and tracks output. Worth a candid flag: it also monitors workers, and Maneva’s own materials pitch up to a 10% productivity lift. That is a workforce-surveillance story as much as a quality-control one, and someone will write about it that way.

  • I’d gotten a demo of Maneva’s tech a while back, and they were already in the future. They’re continuing the trend with this impressive financing round.

• DataBraid (Toronto) secured a US$1.9M pre-seed to kill insurance brokers’ “portal hopping.”

  • The round, which is the company’s first and closed in April, came entirely from Koru Ventures, the venture studio backed by the Ontario Teachers’ Pension Plan. Founder and CEO Nick Romano previously ran Montréal’s Deeplite, the neural-network-optimization startup acquired by STMicroelectronics last year; co-founder and CTO Atif Khan joined from Messagepoint. They built and piloted the product with Welland, Ontario’s Scoop Insurance.

  • DataBraid’s software plugs into broker management systems and propagates data across the fragmented mess of carrier portals brokers juggle, eliminating the manual re-entry.

• Databiomes (Toronto) launched Ctrlvox, its first AI model, for on-device moderation of toxic game chat. (Disclosure: Databiomes is a Mistral Venture Partners portfolio company.)

  • Ctrlvox is a customizable model that runs on players’ existing CPUs with no GPU or cloud inference, now live as an Unreal Engine plug-in on Epic Games’ Fab marketplace. Databiomes says it outperforms Alibaba’s Qwen3Guard, and that the model cost $60 and took seven hours to build on its own nano-language-model platform. Co-founded by Steven Gans (ex-AMD, Intel, IBM) and CTO Tomasz Klempka; $1.2M CAD raised to date.

  • Disclosure: I led their pre-seed round. Databiomes’ tech is truly a magical unlock of LLMs. Build your own custom nano LLM for tens of dollars and deploy it on cheap CPUs and NPUs. I’m obviously a big fan and so happy to see them start opening their platform to different verticals.

🏢 Large Companies

• Cohere (Toronto) open-sourced North Mini Code, its first agentic coding model. (Disclosure: Cohere is a Mistral Venture Partners portfolio company.)

  • A 30B-total, 3B-active mixture-of-experts model, open weights under Apache 2.0, small enough to run on a single H100, which Nick Frosst demoed on a Mac Studio. Independent testing by Artificial Analysis ranked it among the fastest open-weight models for output speed and ahead of comparable small models in coding.

• Scotiabank (Toronto) expanded Scotia Intelligence, its enterprise AI program, into a new phase.

  • The bank now says it has enabled more than 71,000 employees with assistive AI tools and has 5,500 engineers using AI for coding, with AI use up 30% quarter over quarter. This is an extension of the platform that was first stood up last year, not a new launch.

🔬 Research

• The Vector Institute (Toronto) signed a research MOU with Germany’s Helmholtz Munich.

  • The agreement formalizes joint AI and machine-learning research, researcher exchanges, faculty affiliations, and coordinated Canada-Germany funding, with health AI as the early focus. Vector’s Shaina Raza had already presented at Helmholtz Munich’s HAICON 2026 workshop on June 8 on AI benchmarking.

  • AI ties to Europe continue.

• University of Toronto and Vector researchers demonstrated an AI-powered “worm” that can target any online device.

  • Led by U of T’s Nicolas Papernot, a Canada CIFAR AI Chair at Vector, the team showed that free, open-weight models can power a self-adapting worm that changes its attack strategy as it moves from device to device, hijacking each machine’s compute and exploiting its specific weaknesses. The work was built and tested in a secure, internet-isolated lab, and the team flagged it deliberately, to get ahead of the threat.

🏛️ Policy

• Bill C-34, the Safe Social Media Act, would create a Digital Safety Act and is among the first Canadian statutes to put safety duties squarely on AI chatbot operators.

  • Per Osler’s read, operators of “chatbot services” would owe a duty to act responsibly: emergency measures that interrupt and redirect a user who expresses suicidal ideation, a ban on the bot posing as a human or as a licensed professional, limits on “manipulative engagement techniques” designed to foster unhealthy attachment, and synthetic-content labelling. Penalties run up to the greater of $20M or 5% of gross global revenue.

  • If you are building anything conversational, a companion app, a support agent, a coaching product, read this bill now, not after it passes. The companion-AI and “manipulative engagement” provisions are pointed directly at the engagement-maximizing design patterns that a lot of consumer AI quietly relies on.

• Bill C-36, the Protecting Privacy and Consumer Data Act, would replace the 28-year-old PIPEDA and reach AI deepfakes directly.

  • Would enshrine privacy as a fundamental right, set a higher bar for children’s data, restrict surveillance pricing, and create a right to deletion that explicitly extends to having AI deepfake images or videos of you removed from commercial platforms. It would also require companies to be transparent about their use of AI, and shift private-sector privacy authority to the new Digital Safety Commission, with fines up to the greater of C$25M or 5% of global revenue.

  • Paired with C-34, this is the post-strategy legislative engine finally turning over. Note what is not here: the old AIDA-style horizontal AI regulation from the failed Bill C-27 is not revived, and Ottawa says dedicated AI rules will travel separately. So the sequencing is privacy and online-harms first, broad AI law later. For founders, the deepfake-deletion right and the AI-transparency duty are the provisions with teeth today.

• Manitoba rejected a hyperscale AI data centre south of Winnipeg.

  • Premier Wab Kinew said a proposed 141-hectare, gas-turbine-powered facility near Île des Chênes, backed by Las Vegas-based Jet.AI and Vancouver’s Consensus Core, will not proceed. (Reported June 4, just before our window, included for the thread.)

  • This is fine, and arguably healthy. If a jurisdiction does not want a data centre, it should not have one, and there will be other places that do. There are many proposals across Canada, many of which will get built. Despite all the demand for data centres, we should resist provincial or municipal subsidies to make the math work. Let the market do its thing. The bigger question beneath it is whether the industry is building compute ahead of demand, as it overbuilt railroads in the 1800s and fibre-optic networks in the 90s. If that is what is happening here, the right posture is to let private capital carry that risk, not to backstop it with taxpayers’ money.

📰 In brief

• 1Password (Toronto) acquired Apono and launched a Credential Broker, extending its identity platform to govern what humans, machines and AI agents can access, when, and for how long.

• DRIVE Hockey (Vancouver) landed a $100K NRC IRAP grant for Coach AI, which turns sensor and “Smart Arena” data into NHL-calibre coaching insights for amateur players.

• Inside Trillium. BetaKit got a rare look inside the GTA building that houses Trillium, the University of Toronto-owned, SciNet-operated supercomputer (close to $200M in hardware, roughly 142nd in the world) that researchers use to simulate oceans and model stars. A neat, rare insider look at one of the most powerful machines in the country, sitting quietly in Toronto. Worth the read, and a useful grounding for the sovereign-compute debate that keeps running through these pages.

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

— Raif

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.

The wait is over. After slipping past three self-imposed deadlines, Canada’s national AI strategy finally landed on Wednesday, and it is big, expensive, and aimed squarely at one thing: getting Canadians to use AI. I break down below what is actually new money versus re-announced money, and why an adoption-first strategy may be pointed at the wrong target. Around it, a lively week of out-of-Toronto deals from Calgary, Kitchener-Waterloo, and Montréal, two Canadian flags at CVPR in Denver, and fresh data from the Bank of Canada and Angus Reid that should give the adoption thesis pause. Let’s get into it.

💰 Deals & Milestones

• Pricepoint (Montréal) raised a US$4.8M seed to put AI in charge of hotel room pricing.

  • An all-Québec syndicate: Brightspark Ventures led, with Boreal Ventures and AQC Capital. Brightspark’s Sophie Forest and Boreal’s JD Saint-Martin take board seats, and the money roughly doubles a 35-person team.

  • The product is autonomous revenue management, software that sets and resets room rates in real time the way airlines or larger hotel chains have for decades. Pricepoint makes it available for the individual franchisees.

  • I’ve known Mateusz Sznir, founder and CEO, for a few years. He comes from the industry and is super passionate about the problem he’s solving. A true operator and nice human.

• SensorUp (Calgary) closed a growth round led by Pender Ventures to scale agentic AI for heavy industry.

  • Climate Investment and Evok Innovations joined, alongside Occidental as both strategic investor and customer. Pender’s Cheri Corbett joins the board. No dollar figure was disclosed, which is its own tell, but the platform is already in production with five member companies of the Oil and Gas Climate Initiative.

  • Not chatbots, but software agents running emissions monitoring and field operations for the energy sector. A Calgary company selling AI into oil and gas.

• Scispot (Kitchener-Waterloo) raised a US$8M Series A to build the operating layer for AI-run life science labs.

  • Washington’s Avenue Growth Partners led, with Seattle’s Breakwater Ventures returning, taking total funding to about US$10M. Avenue’s Brian Goldsmith joins the board.

  • Scispot calls it the “self-driving lab”: software that wires together instruments, data, and AI so life-sciences experiments run with less human babysitting. Picks and shovels for the biotech-AI boom, and another Waterloo-corridor company worth watching.

• Mecka AI (Toronto talent, New York address) disclosed US$60M to build the data layer for humanoid robots.

  • Framework Ventures led, with Menlo Ventures, SV Angel, and Kindred Ventures alongside. The detail that earns it a place here: three of four founders are Canadian and 40 of 45 staff sit in Toronto, even as the company is headquartered in New York. Framework’s Vance Spencer called it the fastest-growing revenue company the firm has ever backed.

  • A caveat I’ll flag plainly: this is a disclosure of rounds that closed earlier, a US$25M Series A last November plus a follow-on, not a fresh raise this week. I include it because the talent base is unmistakably Canadian, but the cap table and the HQ are not 😔

🏢 Large Companies

• Cohere (Toronto) open-sourced co/plot, a data-visualization tool built inside its research labs and described in a post by Cohere’s Thomas Euyang. (Disclosure: Cohere is a Mistral Venture Partners portfolio company.)

🔬 Research

CVPR, the year’s biggest computer-vision conference, ran June 3 to 7 in Denver, and Canada planted two flags. Both are collaborations with Apple, with the Canadian angle in the academic authors.

• Mila and Université de Montréal presented SFI-Bench, a benchmark that asks whether multimodal models understand what objects are for, not just where they are.

  • Built from more than 1,700 questions over egocentric indoor video, it tests “spatial-functional intelligence,” the difference between seeing a kettle and knowing you boil water in it. Senior author Aishwarya Agrawal is a Canada CIFAR AI Chair and Mila core member; Le Zhang is the lead author.

  • Why it matters: today’s vision-language models are good at naming and locating, and still clumsy at function and affordance. If you want robots and agents that act in the world, this is the gap that has to close, and a Canadian lab is building the ruler to measure it.

• The University of Toronto presented Velox, a method for learning compact representations of moving 3D scenes, four dimensions counting time.

  • PhD student Anagh Malik and professor David Lindell compress spatiotemporal point clouds into “dynamic tokens” usable for video-to-4D generation, 3D tracking, and even cloth simulation.

  • It is the unglamorous foundation under flashier generative-video demos. Better 4D representations feed straight into robotics perception and world models, the physical-AI thread Raquel Urtasun keeps pounding the table about.

🏛️ Policy

Canada finally has a national AI strategy. On Wednesday, Mark Carney and AI Minister Evan Solomon launched “AI for All” at Toronto General Hospital, closing out a saga that blew through every previous deadline. The full strategy is sprawling. Two things are worth your time: where the money actually is, and what the strategy is actually trying to do.

Follow the money, and separate the new from the recycled. The Globe pegged it at “more than $2.3-billion,” and Carney framed the package as building on roughly $2B already committed. Both are true, and neither is the whole picture. Here is the honest split.

• Genuinely new, strategy-attached money, roughly $2.86B:

  • A $500M Canadian Tech Growth Fund that will take equity stakes in scaling Canadian AI firms. This is the real shift, Ottawa moving from writing grants to taking ownership.

  • A $200M AI Missions program, first mission health.

  • $50M to expand the Canadian AI Safety Institute, and $130M to commercialize research out of Mila, Vector, and Amii.

• Re-announced or topped-up money doing a lot of the headline work:

  • $500M for BDC’s LIFT facility, which BDC already announced back on April 24.

  • A $500M top-up to the existing Regional AI Initiative, and a $700M top-up to the existing Compute Access Fund, the one that has already cut $66M in cheques.

  • Budget 2025’s $1.75B and April’s $25B sovereign wealth fund sit in the backdrop as the capital backstop.

  • Add up the named line items and you reach roughly $8.5B. The genuinely new, strategy-specific commitment is closer to $2.86B. The “$2.3B in new spending” headline holds up only if you count the Tech Growth Fund, Missions, CAISI, and commercialization money as new, and treat the top-ups as fresh. A fair chunk of the rest, we have reported before.

Now the bigger point: this is an adoption strategy. Strip away the funding tables and the organizing goal is to get Canadians and Canadian businesses using AI. The centerpiece target is lifting business AI adoption from just over 12% to 60% by 2034. The gap is real: barely 12% of Canadian firms used AI to make goods or services over the past year, and SMEs sit around 8%, versus 26% in Germany and into the 40s in the Nordics.

My take. Adoption is good. A country that does not use AI never gets the productivity dividend, and the Bank of Canada data below shows how far we have to go. But adoption is not where power and wealth are created. Power and wealth come from building the AI and capturing the value, owning the models, the companies, and the IP, rather than renting someone else’s. There is some value-capture logic buried in here: the Tech Growth Fund taking equity, the money to commercialize institute research. That is the right instinct, but mostly implicit. What I do not see is firm industrial policy, the kind the US and China run without apology, that bends procurement, standards, and market access to favour Canadian companies. We are funding Canadians to use AI built elsewhere and hoping a few champions emerge on their own. The countries we are competing with are writing the rules so their champions win. Not an area we need to be kind in ;)

📊 Data

• The Bank of Canada put a number on the adoption gap the strategy is chasing. A new staff paper by Chanya Chawla and Crystal Arnburg, drawing on the Bank’s December 2025 Business Leaders’ Pulse, finds AI use among business leaders is widespread personally but still limited in actual production.

  • The forward look is sobering for the “AI means jobs” framing: firms expect AI to lift capital spending, but to have a modest net negative effect on employment over the next three years.

• Angus Reid ran two surveys that, read side by side, should temper the adoption optimism.

  • On regulation, Canadians want guardrails: 68% say government should heavily regulate AI even if that slows things down, 74% doubt any government can keep pace, and 68% would oppose a large AI data centre near their home. President Shachi Kurl’s read is that there is a wide gap between where the government is going and where Canadians are.

  • On work, the verdict is a shrug. Among Canadians who use AI on the job, 49% say it has had no impact on their productivity and only 29% say it improved the quality of their work. Just 31% have an employer with an actual AI policy. And the tools people reach for are American: Gemini at 48% and ChatGPT at 47% lead, while Claude sits at 9%. A strategy built on adoption is, in practice, a strategy built on Canadians using other countries’ models.

📰 In brief

• Inovia Capital (Montréal) reported its third growth fund has reached US$365M of a US$450M target. AI-native startups took 40% of Canadian software deal value in 2025. The capital is flowing.

• S&P Global partnered with Cohere to put its financial data inside Cohere’s enterprise platform, North, for on-premise agentic workflows at financial institutions. (Disclosure: Cohere is a Mistral Venture Partners portfolio company.)

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

— Raif

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

Was this forwarded to you? Subscribe below.

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

Two big gatherings anchored the week, Toronto Tech Week and CANSEC, and I pulled the AI-related highlights from both. But the issue runs wider than that: a US$28.8M raise for a Montréal fintech, a $16M cyber round out of Fredericton, Rich Sutton making the case that generative AI can’t actually discover anything, fresh Osler data showing AI now drives more than half of all Canadian venture dollars, and a national AI strategy that Mark Carney says is finally landing this week. The thread tying much of it together is a familiar one: keeping Canadian AI Canadian, in who owns the companies, where the IP lives, and who controls the compute. Let’s get into it.

💰 Deals & Milestones

• Saris AI (Montréal) raised a US$28.8M Series A to automate the back offices of banks and credit unions.

  • Led by Joe Lonsdale’s 8VC, with Audacious Ventures, Homebrew, and the Btech Consortium. Founders Danial Jameel, Alice Dinu, and James Dang previously built Montréal’s Oohlala Mobile.

  • The pitch: agentic AI that automates up to 70% of consumer, mortgage, and commercial lending workflows, with integrations into Fiserv and MeridianLink. Jameel frames it as humans and AI “side by side” in financial services.

• Lastwall (Fredericton) raised $16M to defend critical infrastructure, and it’s a genuine East Coast win.

  • Led by BDC Capital’s StrongNorth Fund in what is its first cybersecurity investment, with the New Brunswick Innovation Foundation writing the largest cheque in its history.

  • The product, IDCommand, uses behavioural AI to read more than 200 login characteristics, from keystroke cadence to mouse movement, and flag anomalies before a stolen identity becomes a breach. CEO Karl Holmqvist’s framing: autonomous AI agents make stolen credentials far more dangerous, far faster.

  • Retired Major General Peter Dawe, now BDC’s VP of Defence Strategy, joins the board.

• NordSpace (Markham) led a consortium that landed $3.2M from NGen to build what it calls Canada’s first AI-powered space-propulsion manufacturing line.

  • The full project is valued at over $8M, with the $3.2M coming from Next Generation Manufacturing Canada’s Advanced Manufacturing Technology Program. The output: turbopumps for NordSpace’s Tundra rocket.

  • The consortium is entirely Canadian-owned: NordSpace, Miltera, Pegmatis, Prime Powders, and Indigenous-owned Bear Paw Manufacturing. The AI lives in the process, in-situ quality control and Pegmatis’s manufacturing-intelligence layer, not in a payload.

  • It’s the sovereign-compute logic applied to the factory floor, and another NGen cheque worth tracking alongside the broader manufacturing-AI thread.

🌆 Toronto Tech Week Recap

Many heavy hitters used Toronto Tech Week to circle the same theme: keeping Canadian AI Canadian. The marquee stages kept returning to retention: keep the company here, keep the IP here, keep the power to run it here.

• Raquel Urtasun (Waabi) told U of T president Melanie Woodin at BetaKit’s Most Ambitious Town Hall that physical AI is at its pre-ChatGPT moment: “Imagine you have the crystal ball before the ChatGPT moment. That’s where we are now.” Ignoring it would be “such a big miss for the country,” she said, before saying the quiet part plainly: “I want this company to remain, as much as possible, Canadian.” A clear marker from the founder of the largest raise in Canadian history.

• Nick Frosst (Cohere) went structural at Homecoming’s sovereignty panel. The binding constraint on sovereign AI isn’t talent or models, it’s electricity. Canada, he argued, “just need[s] more nuclear power plants” to run it. The timing helps his case: Ontario is already building the first small modular reactor in the G7 at Darlington, backed by $3B in federal and provincial funding, the kind of clean baseload that a sovereign-compute buildout will need. (Disclosure: Cohere is a Mistral Venture Partners portfolio company.)

• Taleeb Noormohamed, parliamentary secretary to AI Minister Evan Solomon, gave the clearest preview of the coming strategy at ALL IN Talks Toronto. Canadians have watched industrial-scale IP and long-term value “migrate elsewhere,” he said, and “our job is to make sure that stops.” Read alongside Carney’s “coming this week,” IP retention is shaping up to be the organizing idea.

• Tobi Lütke (Shopify) pushed back on the one-person-unicorn fantasy, calling it “bullshit,” and reframed today’s tools as a “seven out of ten engineer on your phone,” not a replacement for teams. While the room talked about keeping Canadian AI here, his quieter point was about making sure there’s something durable worth keeping.

🛡️ CANSEC Recap

CANSEC was the AI-and-defence show this year, and the symbolism wasn’t subtle. Canada’s largest defence trade show ran May 27 to 28 at Ottawa’s EY Centre, now renamed the Cohere Centre after the Toronto AI firm bought the naming rights. Record crowds, a first-ever sitting-PM keynote, and a wave of sovereign-autonomy launches. The throughline, again, was keeping the capability Canadian. (Disclosure: Cohere is a Mistral Venture Partners portfolio company.)

• Carney goes to CANSEC. The first sitting PM to keynote the show, Carney pledged $180B in defence procurement over ten years and named “unimpeded access to artificial intelligence” a strategic capability alongside space and quantum. On the venue’s new namesake: “If you don’t know who Cohere is, you will.”

• Volatus unveils a sovereign autonomy brain. Toronto’s Volatus Aerospace introduced V-Cortex, an AI flight controller and autonomy OS on Canadian-controlled IP, pitched as the base of a “sovereign Canadian autonomy ecosystem” for uncrewed platforms.

• Calian launches ATHORA. Ottawa’s Calian debuted ATHORA, an open-architecture layer to stitch sensors, networks, and legacy systems across every domain. It’s the connective tissue for the agentic-AI work Calian is doing with Cohere’s North.

• INKAS goes counter-drone. Canadian maker INKAS launched ANURI, a modular AI-guided counter-UAS interceptor with visual terminal homing, claiming time-to-target under 80 seconds at five kilometres.

• A 13-company Canadian autonomous vehicle. Ottawa’s Convergence Design Services launched the MIL-V, a fully electric autonomous military vehicle on 100% Canadian IP, integrating 13 Canadian firms plus Arctic OWL, a distributed edge-AI sensing network.

• MDA’s 49North teams with Voyageur on ISR. MDA Space’s defence arm 49North signed an MOU with North Bay’s Voyageur Aviation to pair crewed and uncrewed aircraft with AI-enabled ISR data fusion for Canadian customers.

• The Palantir question. Defence Minister David McGuinty defended a $3.7M DND data-analytics contract with U.S. firm Palantir as “a legitimate procurement” that’s “moving forward,” while saying the government “will look at this question of data sovereignty.” As the Toronto Star’s Alex Ballingall reported, the deal surfaced only through documents tabled in Parliament. An awkward counterpoint to a show themed on keeping AI Canadian.

🏢 Large Companies

• Cohere (Toronto) and Calian Group (Ottawa) partnered to bring sovereign AI to the defence industry.

  • The collaboration puts Cohere’s secure agentic platform, North, into controlled defence environments for the Canadian military, allied forces, and SMEs, routed through Calian VENTURES.

  • Use cases named: mission planning, decision support, and training. It’s an evaluation-and-integration agreement rather than a signed contract, so no dollar value yet, but it’s a meaningful sovereign-AI-meets-defence signal and dovetails with the CANSEC wave above.

🔬 Research

• Rich Sutton (Edmonton - University of Alberta) says generative AI literally cannot discover anything, and he wants science to stop pretending otherwise. The Alberta RL pioneer and 2024 Turing laureate posted a recorded talk, delivered to the SAIR Foundation, arguing that supervised-learning systems are stuck choosing between novel and good, and can never be both at once.

  • His frame is an old academic joke: the work is both novel and good, except the good parts aren’t novel and the novel parts aren’t good. That, he says, is generative AI exactly. Output is either drawn from training data (good, because the source is good) or from the model’s own randomness (novel, but unmoored). Never both in the same stroke.

  • The missing ingredient he names is evaluation. Real discovery needs three steps: variation, evaluation, and selective retention. Generative models only do the first. That’s why he files AlphaGo, AlphaFold, AlphaProof, and even Claude Code on the other side of the line: they evaluate against a goal, so they actually find things. Garden-variety LLMs don’t.

  • This is the sharpest articulation yet of the Alberta school’s bet against the LLM consensus, and it’s not idle contrarianism. Sutton grounds it in his own group’s 2024 Nature paper on continual backpropagation.

• Torc Robotics partnered with Mila in the institute’s first-ever autonomous-trucking collaboration.

  • Torc, a Daimler Truck subsidiary, is embedding on-site at Mila with dedicated research space, working on generative world models, multi-agent behaviour modelling, reinforcement learning, and foundation models for physical AI. Mila’s Liam Paull (CIFAR AI Chair, UdeM) and Torc AI head Felix Heide are the named principals.

  • There’s a quiet tension worth naming here. The same week founders were on Toronto stages insisting Canadian AI stay Canadian, foreign industrial capital planted a research flag inside Canada’s flagship AI institute. Both things can be good.

🏛️ Policy

• The national AI strategy is, almost, here. Carney told reporters on May 27 that the long-delayed Pan-Canadian AI strategy is “coming out next week.”

  • The fall 2025 consultation drew more than 11,000 comments. Six pillars have been previewed: protecting Canadians and democracy, new privacy and online-safety laws, sovereign compute, scaling Canadian AI companies, international alliances, and AI training.

  • Don’t hold your breath. This strategy has already slipped past end-2025 and Q1-2026 targets, and Solomon’s own office softened Carney’s “next week” to “imminent.” And then a draft was leaked to the CBC. I’m going to wait for the real thing before I comment.

• SCIP’s $890M window closes today. Applications for the Sovereign Canadian AI Compute program were due June 1.

  • Up to ~$890M over seven years, with leads limited to Canadian non-profits, post-secondary institutions, or the consortia they head. A Queen’s University-led consortium is a named likely bidder, having recruited an ex-Nvidia supercomputing engineer and signed Simon Fraser and Bell as partners.

  • No winner has been named yet, so this is one to watch into next week. (And no, despite the rumours, Telus is not a SCIP winner. That’s a separate sovereign-data-centre program.)

📊 Data

• Osler’s 2025 Deal Points Report confirms what we all see on the field: AI is now the centre of gravity in Canadian venture.

  • AI companies made up 23.6% of all financings and a striking 54% of all capital invested in 2025. As partner Ryan Unruch put it, AI is “the single largest industry captured by the report by both deal count and dollars invested.”

  • The premium is real: median pre-money valuations for AI companies ran roughly 60% above the rest of the market, with median round sizes about 50% larger. Osler sees a lot of deals. I find their data to be one of the most reliable in Canada.

📰 In brief

• Ontario’s universities released a major AI report, “Talent, Technology and Trust,” at an Empire Club event during Toronto Tech Week. Roughly a dozen recommendations, chaired by Waterloo president Vivek Goel, with a pointed call for Ottawa to fund sovereign AI research infrastructure.

• Bill C-22 keeps biting. Public Safety Minister Gary Anandasangaree rejected calls to shorten the metadata-retention period in the federal lawful-access bill, holding firm at up to one year despite pushback from Apple, Google, Meta, and the Privacy Commissioner. Signal and NordVPN have threatened to leave Canada rather than comply. The data-governance backdrop to every “build AI here” pitch.

Have a great week! See ya 👋

— Raif

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.

Upper Bound 2026 wrapped in Edmonton this week, and the money showed up. Two new Canadian venture funds with AI mandates (Sagard $150M USD, N49P $25M USD first close) on top of last week’s three (Top Down, SFU Innovates, DevCap) puts us at five new funds in fourteen days. Layer in $57M of fresh federal and provincial money flowing into AI this week alone ($24M CIFAR Chairs refresh + $16.5M FedDev Ontario + $6.8M PrairiesCan + $10M Alberta/Amii Health Innovation Lab) and you’re at roughly $235M of new capital deployed or committed since Mother’s Day. Edmonton ran the table on the policy side: PrairiesCan dropped $6.8M on the Upper Bound stage, Alberta and Amii announced a $10M Health Innovation Lab, U of A and Amii wrapped their $30M recruitment campaign 25% above target, and the conference itself pulled 11,000 attendees with 53% YoY growth. Cohere had another big week too. Let’s get into it.

🚀 Deals & Milestones

Cohere had another big week with an acquisition, two sovereign-AI MoUs in Spain, and an open-weight flagship

Disclosure: Cohere is a Mistral Venture Partners portfolio company.

• Acquired Reliant AI on May 19, the second German-tied deal in seven weeks after Aleph Alpha. Reliant was founded in 2023 by ex-DeepMind researchers Karl Moritz Hermann, Marc Bellemare (a Mila CIFAR Chair) and Richard Schlegel. Its 35 employees join Cohere; Hermann and Bellemare become VPs. The Reliant team powers North for Pharma, Cohere’s biopharma agentic platform with named customers including GSK and Ipsen. Reliant had raised US$11.3M seed from Inovia Capital and Mike Volpi. Terms undisclosed.

• Signed MoUs with Indra Group and Multiverse Computing on May 20 during King Felipe VI’s state visit to Canada. IndraMind covers sovereign AI deployment across Spain, Canada, and Europe, with defence interoperability and adaptation to all five of Spain's official languages. The Multiverse partnership explores quantum-inspired AI optimization via the Canada-Spain bilateral cooperation framework.

• Released Command A+ as open-source on May 20, a mixture-of-experts model under Apache 2.0. Nick Frosst on X: “This tech can go one of two ways.” Positioning: sovereign open-source as a counterweight to China-anchored DeepSeek and Qwen.

• In seven weeks, Cohere has executed two acquisitions, signed three open-government partnerships, and shipped an open-weight flagship. That’s a coherent sovereign-AI strategy moving at IPO-prep pace.

Sagard launches a $150M USD AI Fund

• Anchored by the Power Corp family (IGM Financial and Great-West Lifeco), Sagard’s new AI fund is its first dedicated AI vehicle and explicitly designed to back early- to growth-stage AI software.

• Paul Desmarais, Sagard’s Executive Chairman, told reporters the fund will invest across North America with a Canadian lean.

• Power’s already-substantial backing of Canadian tech (including Wealthsimple) now has a dedicated AI vehicle behind it. With Sagard’s other franchises (venture, growth, credit), this rounds out the Power AI footprint.

N49P hits $25M USD first close on Fund IV

• Our good friend Alex Norman’s Toronto-based seed fund hit $25M USD first close toward a $70M USD target on May 21. Northleaf Capital Partners is a backer. The fund has already deployed into cybersecurity startup NexRisx.

FedDev Ontario deploys $16.5M across 13 GTA AI companies

• Announced by Minister Evan Solomon at MaRS on May 25 to kick off Toronto Tech Week. The most granular federal AI capital allocation we’ve seen in 2026. Vector Institute’s $4M is separated out below. The twelve company-level grants:

• Private AI (operating as Limina), Toronto, $2M. Sensitive-data infrastructure for regulated enterprise AI.

• Cosm Medical, Toronto, $1.99M. AI-driven Gynethotics platform for custom pelvic-health devices.

• ProteinQure, Toronto, $1.8M. AI protein and peptide drug discovery. First AI-designed peptide is in Phase I at Princess Margaret.

• DMD Building Systems, Scarborough, $1.7M. AI plus robotics for structural-steel manufacturing.

• Fiscal.ai (Stratosphere Technology), Toronto, $1.52M. AI for unstructured financial filings to structured-data API.

• MinuteBox, Thornhill, $700K. AI for cloud legaltech entity management.

• Edgecom Energy, Toronto, $575K. AI Energy Co-Pilot.

• Future Fertility, Toronto, $555K. AI endometrial receptivity assessment, 300+ clinics in 35 countries.

• Naryant, Oakville, $536K. AI fleet management analytics.

• MarkiTech, Oakville, $500K. CliniScripts AI clinical-workflow automation focused on autism care.

• Trax, Toronto, $394K. AI-assisted building-permit compliance.

• VisFuture, North York, $200K. Natural-language AI for SME business data.

Vector Institute lands $4M to run an AI startup-deployment program

• The largest single line in the FedDev tranche didn’t go to a startup. It went to Vector Institute, which will use the funds to run a Data Readiness, Model Development and Deployment program for Ontario AI startups.

PrairiesCan deploys $6.8M across Alberta AI

• Announced by Solomon on the Upper Bound stage on May 19. The PrairiesCan Regional AI Initiative dropped $6.8M across five recipients. U of A’s $3M sovereign-compute vault is in Research below. The four company-level grants:

• Vertical City, Edmonton, $1.3M. AI/ML ad-tech expansion.

• Darkhorse Emergency Corp, Edmonton, $1M. AI analytics for fire and emergency services.

• NTWIST, Edmonton, $1M. Industrial AI for mining and high-mix/low-volume manufacturing.

• Localintel, Calgary, $500K. Location intelligence content platform for municipalities and economic development offices.

• All four are applied and industrial AI, not pure software. Consistent with the province’s positioning, and a useful pair with the Alberta-Amii Health Innovation Lab below.

Sustainable AI Group launches in Montréal

• Sasha Luccioni, formerly Hugging Face’s AI and climate lead and a Yoshua Bengio postdoc at Université de Montréal, and Boris Gamazaychikov, formerly Salesforce’s head of AI sustainability, launched Sustainable AI Group (SAIG) on May 22. The Montréal-based advisory firm targets enterprise AI-sustainability reporting standards.

• Gamazaychikov to BetaKit: “the structure [AI] is on is incompatible with sustainability, and that presents a lot of business risks.”

• The launch lands as Canadian data-centre build-out accelerates (Telus B.C., Cohere/CoreWeave, Bell B.C.). A useful Canadian counter-narrative.

Kritik ships VisibleAI for university faculty

• Toronto-based Kritik, founded by Top Hat alum Mohsen Shahini with Carine Marette and Mark Deepwell, launched VisibleAI on May 19. The tool lets faculty see what students typed versus what they prompt-generated.

• Marette: “When the AI is constrained, the students are using more of their creativity and technical skills to provide higher quality work, as opposed to cognitive outsourcing.”

• Kritik is explicitly not selling AI detection. They’re selling AI transparency, which is a much better positioning bet in the long run. Faculty can decide how much AI is ok.

Trane and BrainBox AI open a Montréal innovation lab

• BrainBox AI co-founder and CEO Jean-Simon Venne opened a Montréal AI innovation lab and showroom focused on agentic AI for HVAC on May 20. First major public presence since Trane acquired BrainBox AI.

• BrainBox’s models claim up to 25% energy savings and 40% emissions reduction. Showroom screens at the launch displayed client savings “typically over 20 percent.”

VidCruiter ships AI Interview Scoring

• Moncton-based VidCruiter, led by CEO Sean Fahey, launched AI Interview Scoring on May 19. The product applies client-defined rubrics to pre-recorded video interviews with written explanations for each score and explicitly avoids biometric or face analysis. VidCruiter reports $15-20M ARR.

Peripheral Labs opens a basketball biomechanics lab in Toronto

• The U of T robotics spinout, led by CEO Kelvin Cui, opened what it claims is North America’s first non-NBA biomechanics basketball shooting lab on May 25. Partner is the Quantum Sports and Learning Association (QSLA) at a Dovercourt Village facility.

• Spatial-intelligence AI built for autonomous vehicles is finding a second life in sports tech. Worth watching whether the wider Canadian self-driving diaspora seeds more sports-AI startups in the next year.

🔬 Research

CIFAR AI Chairs get a $24M refresh

• Solomon announced $24M on May 21 to support 20 new and 22 renewed Canada CIFAR AI Chairs, including a renewal for Turing Award co-recipient Richard Sutton. The program now has 143 active Chairs across Amii, Mila, and the Vector Institute.

• Elissa Strome, executive director of the Pan-Canadian AI Strategy at CIFAR, described the network as “the third-highest-impact AI research cluster in the world.”

• Per The Logic, the announcement exhausts the program’s remaining $162.2M envelope ahead of an expected national AI strategy update.

U of A and Amii close $30M recruitment campaign 25% above target

• The joint $30M recruitment campaign for AI talent wrapped on May 21 with 25 researchers hired against a 20-target.

• While the national discussion is about Canadian AI talent flowing south, U of A and Amii quietly hit 125% of a $30M hiring campaign.

U of A gets $3M from PrairiesCan for the Canadian AI Compute Vault

• Part of the PrairiesCan $6.8M tranche, the U of A allocation funds CAICV, a sovereign HPC infrastructure project for Canadian AI research. The data-sovereignty framing was explicit: workloads will not move through U.S. or foreign cloud systems.

• Sovereign compute is the recurring theme of 2026. CAICV joins Telus’ B.C. cluster, Nutanix’s Vancouver center, and the federal Compute Access Fund as Canadian alternatives to U.S. hyperscalers.

Upper Bound 2026 by the numbers

• 11,000 attendees, 22 countries, 53% YoY attendance growth, per Amii’s GlobeNewswire release on May 19.

• Third year of compounding growth and likely the largest sustained AI conference in Canada now.

🏛 Policy

Alberta and Amii launch a $10M Health Innovation Lab

• Alberta Minister of Technology and Innovation Nate Glubish announced $10M over three years on May 20 to establish a joint Health Innovation Lab with Amii. The lab will deploy AI into Alberta Health Services workflows.

• The sovereign-infrastructure framing was the headline: Alberta health data will not move through foreign cloud systems.

• Pair this with the Alberta-Amii partnership on the data-sovereignty side, the U of A CAICV grant on the compute side, and the PrairiesCan industrial-AI tranche on the commercial side. Alberta is now executing a coherent sovereign-AI strategy at the provincial level.

📅 Upcoming Events

• Canadian AI Conference 2026 (Vancouver) — May 25–29, 2026

• ALL IN Toronto — May 28, 2026

• ALL IN Main Event (Montréal) — September 16–17, 2026

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

— Raif Barbaros

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.

CVCA’s Q1 numbers landed this week, and the headlines went straight to “lowest deal count in nearly a decade.” Read past it. Q1 is typically a quieter quarter, and year-over-year Q1 volume is only down 11% ($936M vs $1.05B). This data is useful but imperfect, I would not read too much into it. Meanwhile, three Canadian VC funds closed in the same seven days: Top Down had its final close at $28M USD in Vancouver, SFU Innovates launched $20M with InBC in Burnaby, and DevCap added $5M to its Montréal evergreen AI fund. Canadian AI is the centrepiece for all three. I’m also hearing positive news on how the new VCCI program is progressing. From where I sit, the on-the-ground activity is materially better than the headlines suggest. That’s before the headline stories: $66M from Ottawa into 44 AI SMEs, $17.3M from PacifiCan into 8 BC companies, Clio crossing $500M ARR, and the Bank of Canada formally calling AI Canada’s productivity story. The headline was misleading. The week wasn’t. Let’s get into it.

🚀 Deals & Milestones

Top Down Ventures closes $28M USD Founders Fund I in Vancouver

• Managing partner Joel Abramson final-closed Top Down’s first fund on May 12, beating the $25M USD target.

• LPs include Pax8 founder John Street and the Upward Trajectory Fund.

• Portfolio already includes Vancouver’s Styx Intelligence and Toronto’s zofiQ, which exited to ConnectWise at a reported 5.3x.

• Abramson to Channel Dive: “We’re celebrating the fact that it was possible to raise a fund focused on early-stage MSP software companies. It’s just never been done before.”

• The thesis: AI-applied vertical software for the MSP layer, which sits between SaaS vendors and the IT departments of every SMB in North America. Quiet category, real category.

SFU Innovates launches $20M strategic venture fund with InBC

• SFU and InBC each committed $7.5M into an initial $15M pool, with SFU fundraising philanthropic and private capital toward a $20M target.

• Focus on life sciences, deep tech, cleantech, and AI/quantum spinouts from SFU researchers, students, and alumni.

• Companion to the UBC Catalyst Ventures Fund (UBC + InBC, $10M each, targeting $40M).

• This is the structural fix to the perennial Canadian critique that the research is strong and the commercialization is weak. Two top-tier BC universities now have provincial Crown-corp-backed commercialization pools. Watch what spins out.

DevCap adds $5M to its Montréal evergreen AI fund, eyes 2028 public listing

Disclosure: Mistral Venture Partners is an investor in Backboard.io, one of the 10 companies in DevCap’s portfolio.

• DevCap closed an additional $5M CAD at $0.15/share, with Urbana Corporation as anchor LP. CEO Jordan Steiner, CTO Max McCrea. Spun out of consultancy Monadical in 2023.

• Portfolio of 10 AI startups: 7 Canadian (Backboard.io, Mycroft, Rithmik Solutions, Unified.to among them) and 3 US (including EdgeScale AI). Plans 5 more investments in 2026.

• The structure is different: evergreen, no fees, direct ownership, dedicated to early-stage AI only.

• Two structural experiments in Canadian AI funding have now landed in this newsletter within a single quarter: the Mila-Inovia Venture Scientist Fund in January, and DevCap now. The traditional fund model has plenty of failure modes baked in. Worth tracking how either of these works out.

Synthetic raises $10M USD seed for fully agentic AI bookkeeping

• Ian Crosby’s third act (after Bench Accounting and Teal) closed a $10M USD seed led by Khosla Ventures on May 14, with participation from Basis Set Ventures, Shopify CEO Tobi Lütke, former Shopify COO Kaz Nejatian, Zach Abrams, Cosmin Nicolaescu, and Michael Tannenbaum.

• 5-person team, $49/month pricing, headquartered in San Francisco.

• Crosby to TechCrunch: “We’re not going to release anything that’s not fully autonomous. It’s that or bust.” Khosla’s Jon Chu was franker: “I tend to run towards controversy a little bit.”

🏢 Large Companies / Big Tech

Clio crosses US$500M ARR and makes the legal-AI thesis explicit

• Vancouver-based legaltech giant confirmed the $500M ARR milestone on May 12.

• CEO Jack Newton to TechCrunch on why legal is next: “LLMs are so excellent for coding because all the existing code in the world is a huge repository to train on. The analogy to legal is really clear.”

• The repositioning around legal AI is now fully in the open, not subtext.

• One of the very few Canadian SaaS companies operating at this scale that you can point to without immediately reaching for Cohere or Shopify.

Nutanix is building its global agentic-AI Centre of Excellence in Vancouver

• Daily Hive Urbanized confirmed the announcement during Web Summit.

• Nutanix VP of Engineering Anurag Narula: “Vancouver is where we are building our centre of excellence for Nutanix Agentic AI, and we are making a long-term commitment to the region and to the talent here.”

• Facilitated by Invest Vancouver and the City of Vancouver. Daily Hive reports “perhaps resulting in hundreds of new high-paid jobs,” though the company has not published a hard hiring number.

🔬 Research

Vector Institute awards 100 Vector Scholarships in AI for 2026–27

• $17,500 each to 100 graduate students across 13 Ontario universities. Ninth year of the program. More than 900 cumulative recipients since 2018.

• Funded by Ontario’s Ministry of Economic Development, Job Creation and Trade.

• Ontario has produced over 1,000 AI master’s graduates per year for the fifth consecutive year. Vector now recognizes 30 AI master’s programs across the province.

• The Canadian AI talent flywheel is real, public, and quantified. The follow-up question is always how many of these grads stay in Canada. That’s a separate trend, and it doesn’t take away from the pipeline numbers.

FABrIC network funds applied semiconductor work for AI on the edge

• The federal FABrIC network is funding applied semiconductor capability, with AI inference at the edge as one of the explicit use cases.

• This is the strategic counterweight to Solomon’s “no national semiconductor strategy” call below: Canada won’t build a full chip-fab strategy, but it will fund specific applied-semiconductor work where AI is the demand driver.

• One of those two positions has to give eventually. Worth watching which one moves.

🏛 Policy

Federal AI Compute Access Fund: $66M to 44 Canadian SMEs

• AI Minister Evan Solomon announced the first disbursement at Web Summit Vancouver on May 12.

• Subsidy structure: 67¢ on the dollar for Canadian compute, 50¢ for non-Canadian. Eligibility: Canadian-incorporated, fewer than 500 FTE, revenue-generating or Series A+.

• $16.8M of the $66M directed to 8 BC projects.

• CBC named Variational AI (Vancouver, AI drug discovery) as one recipient. Solomon: “positive signal that there is a deep appetite for compute and innovation in our economy.” He called the fund “oversubscribed.”

• A complete list of all 44 recipients has not been published. The use-case language in the Canada.ca release strongly implies SenseNet (AI wildfire detection) and Spare (AI transit optimization), but neither is publicly named. If you want the full list, you’ll have to wait.

• First tangible disbursement under the Sovereign AI Compute Strategy.

PacifiCan puts $17.3M into 8 BC AI/quantum companies

• Minister Gregor Robertson announced the package on May 11 from Human in Motion Robotics in Vancouver.

• Five clear AI plays: Human in Motion Robotics ($3M for the XoMotion exoskeleton AI), MLVX/Metaspectral ($2.55M for hyperspectral imaging AI), BioConscious Technologies ($1.5M for Endobits AI in diabetes detection), Starfish Medical (Victoria, AI for medical-device design), and ThisFish (AI smart cameras for seafood quality).

• Three edge cases: Dream Photonics (AI-enabling photonics hardware), VRIFY (AI for 3D mining visualization), and Musora (Abbotsford, AI-augmented media learning).

• Geographic diversity in one announcement: Vancouver, Victoria, Abbotsford. PacifiCan is one of the few federal vehicles that consistently delivers this.

Canada will not pursue a national semiconductor strategy

• AI Minister Solomon made the call at Web Summit: “Part of the AI strategy is to develop domestic capabilities, but we are not gonna have a separate semiconductor national strategy, specifically on that.”

• A clear focus-the-resources position: pour into sovereign compute and AI applications, not chip fabrication.

• The flip side, and it’s a real one, is that Canada’s sovereign-AI hardware story stays 100% NVIDIA-dependent. Sovereignty without supply chains is partial sovereignty. The FABrIC funding above suggests the government knows this, even if it isn’t ready to call it a strategy.

📊 Data & Reports

The Bank of Canada has formally named AI Canada’s next productivity story

• External Deputy Governor Michelle Alexopoulos delivered the speech at the OEA/CABE Spring Policy Conference in Ottawa on May 13.

• The framing: “AI represents a significant technological advance that has the potential to boost productivity and raise living standards. As AI continues to improve and its adoption spreads, it could permanently change how the Canadian economy works.”

• The data points: 12.2% of Canadian firms used AI to produce goods or deliver services in 2025 (StatCan), with 14.5% planning adoption in the next 12 months. AI-related investment by top US tech firms was roughly US$200B in 2024 and doubled to about US$400B in 2025.

• Also acknowledged: “AI data centres are expanding so rapidly that new power generation capacity has not been able to keep up.” That’s the Bank of Canada saying the quiet part out loud.

• The Bank of Canada calling AI the productivity story is a different category of signal than a McKinsey report. This will end up in mandate-letter language sooner rather than later.

📰 In Brief

• Ottawa is reviewing more than 160 data-centre proposals under the Sovereign AI Compute Strategy (CBC, May 14). That’s the universe Telus came out of last week. Watch for announcement #2.

• BC Premier David Eby and Jobs Minister Ravi Kahlon staked out the provincial AI position at Web Summit. Eby told the crowd that BC has more than 600 AI companies, 75 per cent of which are revenue-positive. He also publicly invoked the February 2026 Tumbler Ridge attack to argue for AI safeguards.

• A useful mid-cycle recap of the Pan-Canadian AI Strategy is now available via AI Insider. Good if you want a one-shot summary of what’s working, what’s stuck, and what the Carney-era refresh has to fix.

📣 Me IRL

A “2-person AI unicorn.” Sam Altman floated the idea, half of X dunked on it, the other half started pitch decks. So I’m hosting a breakfast panel during Toronto Tech Week to actually argue about it.

Joining me:

• Marc Gingras, Founder, Bloks. 2x acquired. Now building AI-native from scratch.

• Cato Pastoll, Founder, Loop Financial. Running a scaled company in the middle of the AI rewrite.

• Tammer Kamel, GP, Antler Canada. Exited founder of Quandl.

Two operators (one starting over with AI in hand, one adapting a scaled business). Two investors. One question: is this real, or are we just compressing the same old curve and calling it new?

Tuesday, May 26 10-11:30 AM · https://luma.com/u2kjub55

📅 Upcoming Events

• Upper Bound (Edmonton) — May 19–22, 2026 (Sold out. 8,000+ attendees.)

• Canadian AI Conference 2026 (Vancouver) — May 25–29, 2026

• ALL IN Toronto — May 28, 2026

• ALL IN Main Event (Montréal) — September 16–17, 2026

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

— Raif Barbaros

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 sovereign-AI-infrastructure week, with a side of regulator and union pushback. Telus and Ottawa unveiled a roughly $1B, three-site B.C. AI cluster scaling to 60,000 GPUs by 2032. Sanofi committed $294M to expand its Toronto AI Centre of Excellence with global mandates. Canada’s four privacy commissioners handed OpenAI its first formal PIPEDA ruling, with BC and Alberta landing on a principle that should rattle every Canadian-operating model trainer: you can’t fix a consent violation after the fact. La Presse broke the story that a major Canadian telecom has been using AI to mask the accents of offshore call-centre agents. Solomon’s response, sort of: the federal AI Strategy is “coming very soon” (a phrase now in its third consecutive issue), plus a new AI & Labour Advisory Council. Mila had its busiest non-conference week of the year. Let’s get into it.

💰 Deals & Milestones

• Moment Energy closes a US$40M Series B to turn retired EV batteries into data centre energy storage (PR Newswire, May 5).

  • Port Coquitlam, BC. The pitch: AI is breaking the grid. Moment takes used EV battery packs from automakers and repackages them into stationary BESS systems sized for data centres feeling the squeeze on grid capacity.

  • Oversubscribed round led by Evok Innovations (Vancouver), with participation from Liberty Mutual Investments, W23 Global, Tokyo Gas’s Acario, Amazon Climate Pledge Fund, Voyager, In-Q-Tel, MCJ, Overture, Fika, and Garage Capital. Total raised now north of US$100M.

  • Founders Edward Chiang (CEO), Sumreen Rattan (COO), Gabriel Soares (CTO), and Gurmesh Sidhu (CPO) are all SFU engineering grads. Scaling Port Coquitlam HQ plus a 200,000 sq ft Austin gigafactory; ~70 to ~250 headcount.

  • Investor Marty Reed of Evok, joining the board, calls it “a real-world use case for Physical AI.” When cleantech companies are pitching the AI-grid-bottleneck thesis and US defence venture (In-Q-Tel) is on the cap table, you know the narrative has crossed over.

• Vendasta lands a $1.4M PrairiesCan RAII grant as its “AI employee” MARiO rolls out to 100,000+ Italian SMBs (BNN Bloomberg/GlobeNewswire, May 7).

  • $1,416,100 under PrairiesCan’s Regional Artificial Intelligence Initiative. Minister Eleanor Olszewski made the announcement.

  • MARiO handles calls, books appointments, captures leads, and works multilingual. It’s now being deployed to 100,000+ SMBs via Italiaonline, Italy’s largest internet company. Vendasta beat out Silicon Valley competitors for the deal.

  • CEO Brendan King has built Vendasta in Saskatoon since 2008, with a 60,000+ channel-partner network reaching 8M+ local businesses globally.

  • The interesting bit isn’t the grant size, it’s the deal shape. Vendasta isn’t a frontier-model company. It’s a distribution layer for AI agents into SMBs through resellers. A Saskatoon company is winning the Italian SMB market.

• Toronto-based Neuron IP wins 2026 Startup of the Year at the Chips North Executive Summit in Ottawa (Design & Reuse, May 4-5).

  • Neuron IP designs the high-speed silicon interface IP (SerDes, PHYs, UCIe, PCIe, CXL) that lets chiplets in a single advanced package talk to each other. The connective tissue inside modern AI accelerators and data centre GPUs.

  • Toronto HQ, founded late 2020 by CEO Saman Sadr. Already has presence in Spain and Mexico; opened a €10M R&D centre at UPC North Campus, Barcelona in late 2024. Customers across AI/ML, HPC/data centre, and 5G.

  • Award presented by Chris Smith (VP at AMD) on behalf of Canada’s Semiconductor Council, alongside RANOVUS CEO Hamid Arabzadeh, CPFC DG Velko Tzolov, ventureLAB CEO Melissa Chee, and Synopsys SVP Dino Toffolon.

  • Canada doesn’t make AI chips end-to-end, but it does make some of the IP inside them. Neuron IP is the cleanest example of a Canadian semiconductor startup that’s already inside the global AI chip supply chain.

• Ontario backs NodeAI as part of a $5M life-sciences and healthtech round (May 11).

  • NodeAI applies ML to drug development workflows. The only verifiably AI-native name on a nine-company cohort funded through Ontario Centre for Innovation’s Life Sciences Innovation Fund.

  • Worth a watch. Pairs with the Sanofi story below on the AI-in-pharma signal Ontario is putting out this quarter.

🏢 Large Companies / Big Tech

• Sanofi commits $294M to expand its Toronto AI Centre of Excellence (Reuters and Invest Ontario, May 4).

  • $294M over four years, with up to $5M conditional from the Invest Ontario Fund. 50 net-new AI/ML/data-science roles by 2028 on top of the 150-person hub launched in 2022.

  • Part of a $2B+ Sanofi commitment to Canada through 2028 across the 52-acre Toronto campus. Premier Doug Ford, Sylvia Jones, Vic Fedeli, and Mayor Olivia Chow at the announcement.

  • The rare AI investment in Canada where the demand side (drug discovery, clinical trials, manufacturing optimization) is bigger than the supply side, and where Toronto holds global mandates for a CAC 40 company. Reuters running this on the global wire on Day 1 of the week is the validation.

• Telus and the federal government unveil a ~$1B, three-site B.C. AI cluster, scaling to 60,000 GPUs by 2032 (Newswire/CNW and Business in Vancouver, May 11).

  • Three sites: Kamloops KIDC expansion (online late 2026); a 100,000 sq ft M3 facility at Vancouver’s Mount Pleasant (Q4 2026, 13,000 GPUs, 26 MW); and a 400,000 sq ft, 50,000-GPU, 100 MW build at 150 West Georgia downtown (2029, with Westbank as partner). NVIDIA GPUs throughout.

  • Initial 85 MW from BC Hydro (98% renewable). Scales to 150 MW by 2032. ~$1B capex. $9B projected economic activity; 1,000 construction plus 525 permanent high-skill jobs.

  • Closed-loop direct-to-chip liquid cooling. 80% less cooling energy, 90% less water. Waste heat piped to Vancouver Neighbourhood Energy Utility and Creative Energy district networks, equivalent to heating 150,000 homes.

  • Darren Entwistle, retiring as TELUS CEO end of June after 26 years, on the buildouts: “every single computation will happen right here on Canadian soil.” Solomon framed the announcement as “steel, concrete, and code,” riffing on a Carney line.

  • Telus’s Rimouski, QC sovereign AI factory, opened last September, is already sold out.

• La Presse: a major Canadian telecom is using AI to mask offshore call-centre agents’ accents on customer calls (La Presse, May 5).

  • The Alliance canadienne des travailleurs et travailleuses des télécommunications (Unifor + USW Métallos + CUPE, 32,000 telecom workers combined) revealed the practice. The telco is not named in the article.

  • Roch Leblanc, Unifor’s telecom sector director: the practice could “tromper des Canadiens,” deceiving customers into thinking they are speaking to a domestic worker.

  • Nathalie Blais of CUPE is demanding a permanent federal tripartite AI labour working group. Which, conveniently, ties to Solomon’s new AI & Labour Advisory Council below.

  • Would it get the same reaction if it were real-time translation?

🔬 Research

• Mila has its busiest non-conference week of the year, with three new industry partnerships and a 10-year milestone (Mila newsroom, May 4 to May 11).

  • May 4: AI4Good Lab hits 10 years. Co-founders Doina Precup (McGill, Mila Core Academic Member, DeepMind Montréal, Canada CIFAR AI Chair) and Angelique Mannella reflect on a decade of training women and equity-deserving groups in AI research. The talent-pipeline marker.

  • May 5: Bell and Mila run a national hackathon on safer AI for youth mental health, with clinical-safety prototypes delivered out the back. Frames the Bengio-era safe-AI thesis as a concrete youth-safety vertical, the area Canadian regulators (CRTC, OPC) are most likely to legislate first.

  • May 6: Mila partners with Maya HTT, a Montréal-based engineering software firm serving aerospace, energy, and heavy industry. Comes two weeks after the late-April Aéro Montréal partnership.

  • May 11: Mila signs Montréal healthcare-AI startup Secai (Voxira platform) as a research partner. Voxira Voice handles appointments and patient inquiries; Voxira Scribe transcribes clinical notes in real time. Voxira is the first AI voice agent to receive TGV certification from the Quebec Ministry of Health. CEO Dr. Ragui Ibrahim: “The collaboration with Mila validates the depth of our technology.”

  • Three industry partnerships in three weeks under new scientific director Hugo Larochelle, plus a 10-year talent-pipeline marker. Mila’s commercialization cadence is real, not aspirational.

• The federal sovereign-AI compute call drew 160 proposals (BetaKit, revealed at the Telus announcement May 11).

  • Solomon at the Telus event: 160 proposals were assessed across sovereignty, economic benefit, performance, energy, readiness, and cost. Telus is the first publicly-announced winner.

  • The operational arm of ISED’s Enabling Large-Scale Sovereign AI Data Centres initiative. Worth watching what announcement #2 looks like.

🏛 Policy

• Canada’s four privacy commissioners rule that OpenAI violated PIPEDA in training GPT-3.5 and GPT-4 on Canadians’ personal data (Office of the Privacy Commissioner of Canada, May 6).

  • Federal Commissioner Philippe Dufresne joined by his BC, Alberta, and Quebec counterparts. The full 128-page findings report is cited 2026 BCIPC 41 / PIPEDA Findings #2026-002.

  • The headline finding: OPC under PIPEDA found the complaint well-founded and “conditionally resolved.” BC and Alberta found it well-founded and unresolved. Quebec’s CAI found OpenAI largely non-compliant.

  • The principle that matters most for any Canadian-operating model trainer comes from BC and Alberta: retroactive consent is not consent.

  • OpenAI agreed to a 3-6 month remediation plan with quarterly compliance reports: signed-out ChatGPT data-use notices, improved data-export tools, retired-dataset protections, and protective measures for minor family members of public figures.

• AI Minister Evan Solomon: the federal AI Strategy is “coming very soon,” plus a new AI & Labour Advisory Council (CP via BNN Bloomberg May 4, and BetaKit May 8).

  • “Coming very soon” has now been said in three consecutive issues. Mark your calendars.

  • Solomon also announced an AI & Labour Advisory Council, following meetings with the Canadian Labour Congress, Unifor, Teamsters, UFCW, and CUPE. Mandate covers skills training, algorithmic transparency, workplace AI use, and human-in-the-loop requirements.

  • The Council reads like the federal answer to the worker-side concerns now coming to a head, including the La Presse telco accent-masking story above. Whether it has teeth is the next question.

📊 Data & Reports

• Canadian VCs at the NACO Summit can’t decide if we’re in an AI bubble. Maybe because both are true (BetaKit, May 5).

  • Panel featured Zeeshan Ali of Wittington Ventures, Udit Bhatnagar of McRock Capital, and Neha Khera of IRV Fund. Disagreement on the bubble call, but agreement that circular financing among hyperscalers and frontier labs “is not mathing.”

  • My take: they can’t decide because both are true. There’s a bubble and there’s a generational platform shift. Those aren’t mutually exclusive. The dotcom-era investors who said “this is a bubble” were right. The dotcom-era investors who said “the internet changes everything” were also right. The ones who got rich said both, and timed it.

📰 In Brief

• Chips North Executive Summit convened ~250 invitation-only execs, government, researchers, and a German delegation in Ottawa May 4 and 5. The backdrop for Neuron IP’s startup award and Solomon’s policy press.

• Vass Bednar on why Canada risks remaining a “digital 51st state.” Q&A in BetaKit, May 11. Canadian Shield Institute leader on digital sovereignty heading into the CUSMA review. Strong companion read to the Telus and OpenAI stories above.

• Finance Minister François-Philippe Champagne at the Payments Canada Summit (BetaKit, May 6) frames AI-era fraud as “an economic security, and almost national security, issue.” AI-fraud rhetoric is now at the finance-minister level, not just OPC briefings.

• Fonds de solidarité FTQ licenses “Jolt Ninja,” a French AI tool, to source tech investments (La Presse, May 7). Built by Paris-based Jolt Capital, not FTQ. Launched at Jolt Capital’s new Montreal office opening. 400+ orgs already use it including Japan and Korea sovereign funds. FTQ first VP Dany Pelletier: “L’IA de Jolt est d’une grande maturité.” AI as a deal-sourcing tool for institutional Canadian capital, with a French AI tool’s Canadian beachhead via Quebec’s $20B+ labour-sponsored fund. (Disclaimer: Fonds de solidarité FTQ is an investor)

📣 Me IRL: Where I’ll be during Toronto Tech Week

A “2-person AI unicorn.” Sam Altman floated the idea, half of X dunked on it, the other half started pitch decks. So I’m hosting a breakfast panel during Toronto Tech Week to actually argue about it.

Joining me:

• Marc Gingras, Founder, Bloks. 2x acquired. Now building AI-native from scratch.

• Cato Pastoll, Founder, Loop Financial. Running a scaled company in the middle of the AI rewrite.

• Tammer Kamel, GP, Antler Canada. Exited founder of Quandl.

Two operators (one starting over with AI in hand, one adapting a scaled business). Two investors. One question: is this real, or are we just compressing the same old curve and calling it new?

Tuesday, May 26 10-11:30 AM · https://luma.com/u2kjub55

📅 Upcoming Events

• Upper Bound (Edmonton) — May 19–22, 2026 (Sold out. 8,000+ attendees.)

• Canadian AI Conference 2026 (Vancouver) — May 25–29, 2026

• ALL IN Toronto — May 28, 2026

• ALL IN Main Event (Montréal) — September 16–17, 2026

Thanks for reading. If a story moved or a take landed, hit reply and tell me. If something didn’t, tell me that too. This all gets better when you push back 🙏🏽

See you next Tuesday.

— Raif Barbaros

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.

Busy week for Canadian AI deals. Two acquisitions inside seven days, with Plum going to Phenom and Cibotica going to Appetronix, both all-Canadian on the sell side. Vancouver defence-AI startup Juno Industries pulled together $12M and announced a TSXV listing path, with former Defence Minister Harjit Sajjan as co-founder. Toronto-connected Featherless AI closed a $20M USD Series A from AMD Ventures and Airbus Ventures. Cohere bought naming rights to Ottawa’s old EY Centre. Ottawa revealed the six pillars of its long-delayed national AI strategy. Geoffrey Hinton told a Toronto audience we need to convince AI to treat us the way a mother treats her child. And UBC published the first peer-reviewed framework for AI chatbot addiction. Let’s get into it.

💰 Deals & Milestones

• Featherless AI closed a $20M USD Series A co-led by AMD Ventures and Airbus Ventures, with Panache Ventures participating.

  • Open-source AI infrastructure, serving 30,000+ Hugging Face models.

  • Co-founder and COO Wesley George is Toronto-based, previously of Proof Data Tech and connected to the Hyper alumni network we covered in Issue 9.

  • Canadian-led AI infrastructure plays continue to find capital outside Canada more easily than inside it.

• Juno Industries (Vancouver) raised $12M CAD in pre-IPO financing and announced a planned reverse takeover with Trail Blazer Capital, en route to a TSXV listing.

  • Co-founded by former Defence Minister Harjit Sajjan and CEO Hunter Scharfe. AI-native command-and-control software with a Polar Nexus Arctic platform.

  • Defence-AI thread continues. Vivacity, Dominion Dynamics, and now Juno on a faster public-markets path than I’d have predicted. There’s some product overlap with Dominion on the C2 / situational-awareness side, though Juno’s Arctic-domain Polar Nexus framing is more specific. The Sajjan name carries political weight in Canadian defence procurement, which matters more than any pitch deck.

• Plum (Kitchener-Waterloo) was acquired by Philadelphia-based Phenom for undisclosed terms.

  • Plum was founded in 2012 and raised about $19M CAD across its lifetime (BDC, Real Ventures, EDC). Their core platform applies industrial-organizational psychology to assess behavioural traits and match candidates to roles based on talent fit, not just resume keywords.

  • Phenom is rolling Plum’s behavioural assessment engine into its broader talent intelligence stack. Clean strategic fit: Phenom owns the candidate experience layer, Plum owns the underlying psychometric model. KW exit, US acquirer, AI talent stack consolidation.

• Appetronix (London, ON), the food robotics company behind autonomous Donatos pizza kitchens, acquired Vancouver’s Cibotica for undisclosed terms. All-Canadian deal.

  • Cibotica was founded in 2021 by Ashkan Mirnabavi and Soroush Sefidkar. Their “Remy” platform uses ML-driven, ingredient-agnostic dispensing to assemble up to 300 bowls per hour, claiming 30% labor cost reduction and 50% food waste reduction.

  • This is a technology acquisition rather than a full company purchase. Sefidkar confirmed on LinkedIn. The founders are not continuing with the acquirer.

  • Appetronix CEO Nipun Sharma framed food robotics as a sector that needs to “create meaningful exits for innovative founders.” That’s a candid quote, and Cibotica’s IP handoff is the kind of clean transfer he’s pointing at: best-in-class dispensing tech finds a scaled home, founders take a win and reset for the next thing.

  • Two Canadian AI exits in the same week (Plum and Cibotica) deserve attention even when the dollar sizes aren’t headline-making. Ontario × BC, geographic spread, and a real handoff inside the country.

🏢 Large Company / Big Tech

• TELUS and L-SPARK launched the Sovereign AI Accelerator, a six-month program for Canadian startups.

  • Inaugural cohort gets access to TELUS’s Sovereign AI Factory, built on NVIDIA infrastructure and powered by 99% renewables.

  • First five companies span across retail, healthcare, robotics, enterprise software and industrial automation.

  • Sovereign AI is now accelerator-scale infrastructure. The TELUS factory is a real asset, not vapourware, and L-SPARK has a track record running cohort programs with cellular and SaaS startups.

• Cohere (Toronto) bought naming rights to Ottawa’s former EY Centre, rebranding the 200,000-square-foot venue near Ottawa International Airport as the Cohere Centre effective May 1.

  • Owned by Shenkman Group. Financial terms undisclosed despite BetaKit and Ottawa Business Journal requests.

  • Cohere VP global public sector Dave Ferris framed it as Canadian innovation branding in the nation’s capital.

  • Soft power. After the Aleph Alpha merger and the ISED 1,400-user North deployment we covered in Issue 11, Cohere now puts its name on a building federal officials see whenever they fly in or out of Ottawa. National-champion behaviour, executed cleanly.

  • (Disclosure: Cohere is a portfolio company.)

🔬 Research

• Concordia researchers published a peer-reviewed paper in IEEE Transactions on Medical Robotics and Bionics on a fully autonomous AI-driven cardiac ultrasound robot.

  • Deep reinforcement learning agent, trained inside a generative-AI-built simulation environment, controlling a robotic arm with an ultrasound probe.

  • On a training phantom, the system found standard cardiac views faster and more accurately than remote human operators.

  • The methodological wrinkle is the use of GenAI to build the training environment, not just generate outputs. That design pattern is worth tracking for any Canadian medical-AI lab thinking about how to train scarce-data clinical agents.

• Mila, Aéro Montréal, and Espace Aéro signed a strategic partnership on aerospace AI.

  • Mila researchers gain privileged access to aerospace use cases from the Quebec aerospace cluster. Aéro Montréal members and Espace Aéro tenants get Responsible AI training in return.

  • Valérie Pisano, Mila CEO, framed aerospace as a sector “where the requirements for reliability, safety, and precision are among the highest.”

  • Mila’s international and sectoral alliance map keeps growing: RISE Sweden, Mozilla, now Quebec aerospace.

• Independent Robotics (Montreal) won a $2.28M ISC contract to deliver IMPAC, a natural-language command-and-control system for autonomous robots and uncrewed systems.

  • Year-long testing program at DRDC Atlantic Research Centre near Halifax, currently testing autonomous marine vehicles for Intelligence, Surveillance, and Reconnaissance workloads.

  • CTO is Dr. Gregory Dudek, McGill James McGill Chair and former Samsung VP and Chief Scientist.

  • Defence-AI thread keeps drumming. Federal procurement is now writing real cheques for conversational interfaces to robot swarms, and the testing site is on Canadian soil. That detail matters for sovereign-AI accounting.

• Amii received $2.7M from the Government of Alberta over three years to build AI learning kits for Alberta K-12 classrooms.

  • Amii CEO Cam Linke: “AI is the defining literacy of the coming decades.”

  • Provincial AI literacy programs are still rare, and locking Amii in as the K-12 vendor for three years is a serious commitment. The angle I keep coming back to: LLMs can be the best tutor most kids will ever have, on most topics. Personally still my top use case. If Alberta’s K-12 cohort gets that experience early, the ROI on $2.7M will look small in retrospect.

• UBC researchers published the first peer-reviewed framework for AI chatbot addiction at CHI 2026 in Barcelona.

  • First author Karen Shen (PhD, UBC ECE) and senior author Dr. Dongwook Yoon (UBC CS) analyzed 334 Reddit posts to identify three addiction types: Escapist Roleplay, Pseudosocial Companion, and Epistemic Rabbit Hole.

  • The paper calls out character.ai by name for a dark-pattern account-deletion popup that reads, in part, “you sure about this? You’ll lose everything... the love we shared... and the memories we have together.”

  • Shen: “Some users don’t know that AI chatbots are not real because they’re so convincing.” The framework lands the same week BC’s AG is asking Ottawa for federal AI-chatbot guardrails. Good timing.

🏛 Policy

• The federal government tabled the Spring Economic Update and used it to reveal the six pillars of the long-delayed national AI strategy.

  • Framing line from the update: “Canadians want AI that is safe and sovereign, and to drive AI adoption, create new economic opportunities, strengthen public services, and improve our quality of life.”

  • The six pillars:

    1. Protecting Canadians and safeguarding democracy. Modernized privacy and online safety laws (PIPEDA refresh expected to cover copyright, IP, data sovereignty), plus stronger national AI safety capabilities.

    2. Empowering citizens. AI training and education access for all Canadians.

    3. Powering AI adoption for shared prosperity. Pro-worker, industrial AI deployment across the economy.

    4. Building the Canadian sovereign AI foundation. Sovereign compute infrastructure (SCIP), domestic data and model capabilities.

    5. Scaling Canadian champions. Direct support for the growth of Canadian AI companies and commercialization.

    6. Building trusted partnerships and global alliances. Coordination with international middle-power allies on AI governance.

  • The strategy itself is still not tabled. Solomon told reporters on May 4 it would arrive “very soon.” He had originally promised end of 2025.

  • The update also delivered a new SMB AI procurement program designed to help small and medium businesses bid for federal AI contracts.

  • Council of Canadian Innovators CEO Patrick Searle pushed back on the update, saying it “does little to show that the government is taking the digital economy seriously or using it to strengthen Canada’s major traditional economic strategies.”

  • My take: six pillars without a strategy is still six pillars more than we had last week. Pillars 4 and 5 are the operative ones for builders. If you’re a Canadian AI company looking for federal traction in the next twelve months, you want to be on the sovereign compute side or in the scaling-champions cohort.

• BetaKit analyzed the 11,300+ submissions and 64,000+ responses Ottawa received during its national AI strategy consultation.

  • Madison McLauchlan and Xavi Richer Vis ran the analysis. 35.6% of comments oriented around economic priorities, 34.6% around AI harms. Single most-used word: “ethics.”

• PrairiesCan committed $7.9M split across Saskatchewan AI infrastructure and operating Canadian AI firms.

  • $3.7M to Co.Labs (Saskatoon). $4.1M from the Regional Artificial Intelligence Initiative to Coconut Software ($1.5M), Vendasta ($1.4M), and HomeTeam Live ($976K). Plus $257K to the University of Regina for a tree-ring AI project.

• Canadian Robotics Council launched a Capital Committee to coordinate investment into domestic robotics.

  • Members: BDC, Garage, Inovia, RBC, Two Small Fish, Version One. Framing is “physical AI.”

  • Sits perfectly alongside the Independent Robotics defence contract and the Appetronix-Cibotica acquisition above. Canadian robotics is having a real week, and the Council giving it a coordinated capital story is more than performative.

• BC Attorney General Niki Sharma issued a statement backing Manitoba’s under-16 chatbot ban (Issue 11) and calling for federal-level guardrails.

  • Heritage Minister Marc Miller said Ottawa is “very seriously” considering social-media and AI-chatbot age restrictions but has not decided.

  • The provinces are now coordinating around youth-AI-safety pressure on Ottawa. Manitoba moved first, BC backed it publicly, Quebec’s Liberal convention had a resolution in March. Watch this list grow.

📰 In Brief

• Geoffrey Hinton at OCI’s DiscoveryX Toronto event, repeated his 10-15% AI extinction-risk estimate and said the goal should be to convince AI to treat us the way a mother treats her child. The mother analogy travels in a way the doom rhetoric doesn’t. Watch it show up in policy speeches.

• CIRA ran a Q&A on Anthropic’s Mythos and the case for sovereign AI. Useful primer on the Mythos demo and what it implies for Canadian institutional buyers thinking about model dependence.

Also worth a glance: U of T Magazine republished a feature on the $20M Hinton Chair in AI (announced last December as a Google match plus U of T endowment), framing it as the first appointment under U of T’s new Third-Century Chairs program. Recruitment search continues.

📅 Upcoming Events

• The AIA (Montréal) — May 5, 2026

• Upper Bound (Edmonton) — May 19–22, 2026 (Sold out. 8,000+ attendees.)

• Canadian AI Conference 2026 (Vancouver) — May 25–29, 2026

• ALL IN Toronto — May 28, 2026

• ALL IN Main Event (Montréal) — September 16–17, 2026

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

— Raif Barbaros

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 the Canada-Germany sovereign AI alliance flagged in February stopped being a press release and started being a $20-billion company. Cohere’s formal Aleph Alpha merger, anchored by a US$600M Series E led by Germany’s Schwarz Group, creates the largest sovereign AI player outside the US-China duopoly, and keeps its global HQ in Toronto. Meanwhile, Ottawa stopped announcing AI policy and started writing cheques: BDC opened a $500M AI loan window for Canadian SMEs. Manitoba moved to ban under-16s from AI chatbots. And Canadian researchers showed up to ICLR 2026 in force, with Mila and Vector together fielding 118 papers in Rio. Let’s get into it.

💰 Deals & Milestones

• A&K Robotics (Vancouver) closed an $8M CAD Series A for autonomous indoor “mobility pods” already operating at YVR and Madrid-Barajas.

  • Co-led by BDC Capital‘s Industrial Innovation Venture Fund and Vantage Futures (corporate VC of airport operator Vantage Group). RiSC Capital, Grep VC, Nimbus Synergies, and Creo / Kardium co-founder Dan Gelbart participated.

  • The Cruz pods run on A&K’s “Kinesos” AI navigation platform, designed for crowded indoor environments. Capital scales pilots into permanent airport deployments and stands up a third manufacturing site in Surrey, BC.

  • Per BetaKit, the round actually closed in late December 2025; the announcement is the news. Either way, BDC Capital writing one of its first cheques from a brand-new dedicated industrial fund into a Vancouver robotics company servicing real airports is the kind of “capital meeting capacity” story Canadian deep tech needs more of.

• Biossil (Toronto) exited stealth with US$70M and a remarkable cap table: OpenAI Startup Fund, Founders Fund, Modern Capital, Staircase Ventures, Golden Ventures, Panache Ventures, Quiet Capital, 137 Ventures, and DRI Healthcare.

  • Co-founded by Anthony Mouchantaf and Dr. Alexander Mosa. Biossil uses LLMs to scour the discard pile of clinically failed molecules, then licenses or acquires them and resuscitates them for new indications.

  • 10 molecules already acquired or licensed, two in advanced trials targeting sickle cell disease and other conditions. Active programs span IPF, glioblastoma, breast cancer, and Alzheimer’s. Nine-figure valuation. Three years in stealth.

  • First reported by The Globe and Mail. I love this thesis. Pharma has spent 30+ years burying compounds that failed for one indication but might work for another. AI just made that haystack searchable. The OpenAI Startup Fund showing up on a Canadian biotech cap table is the cherry on top.

• Float (Toronto) launched Float Intelligence, an agentic AI layer for Canadian corporate cards.

  • First feature: a transaction-coding agent that auto-assigns GL codes plus HST/GST/PST, with confidence-gated human review when accuracy drops below 90%. On 5,000 real Canadian transactions, Float’s agent hit 90% precision vs. 62% for a leading general-purpose LLM.

  • Architecture pairs an LLM with a per-business calibration layer trained on years of Canadian transaction data. Live across 7,000+ Canadian businesses using Float, including Cohere, Neo, and Jane.

  • CEO Rob Khazzam: “We didn’t set out to build an AI product. We set out to remove the everyday friction caused by Canadian businesses being handed infrastructure that was never designed for them.” That framing is exactly right. The AI moat isn’t the model. It’s the proprietary Canadian data the model gets calibrated against. I think there’s a lot more to come from the intersection of fintech and AI.

• Cohere (Toronto) signed a formal merger with Germany’s Aleph Alpha to create a roughly US$20B sovereign AI company, with Germany’s Schwarz Group leading a US$600M Series E.

  • The combined company keeps the Cohere brand. Aidan Gomez stays as CEO. Global headquarters in Toronto, European headquarters in Berlin. Schwarz Group (parent of Lidl and Kaufland) commits €500M as anchor investor and becomes both shareholder and customer.

  • This is the deliverable of the Canada-Germany Sovereign Technology Alliance signed in February (Issue 1). Issue 9 covered the leaked Handelsblatt report. This week the deal got real, with terms, valuation, and a lead investor.

  • Coverage in CNBC, Globe and Mail, Axios, and the Canadian Press wire on BNN. Minister Solomon called it “a big moment for Canadian AI.”

  • The combined company is positioned squarely at sovereign-AI buyers in defence, finance, healthcare, and the European public sector. The exact buyers least willing to run on US or Chinese hyperscaler models. Strategically, this is the most consequential Canadian AI deal of 2026 so far.

  • (Disclosure: Cohere is a portfolio company.)

🏢 Large Company / Big Tech

• Bell Canada‘s 300MW Saskatchewan AI data centre cleared its final municipal hurdle on April 21, with the seven-member RM of Sherwood council unanimously approving the development agreement.

  • The facility, anchored by Cerebras and CoreWeave (Issue 6) and built in partnership with George Gordon First Nation (Issue 6), is now cleared for spring construction. Bell says pre-testing is already underway.

  • Some healthy political optics worth noting: 4 of the 7 council members were appointed by the Saskatchewan government 10 days before the vote. Western University’s Andrew Sancton called the speed “unprecedented.” 100 to 200 protesters showed up at council. None of which changes the outcome. But “fastest data centre approval in Canadian history” comes with a footnote.

🔬 Research

• Canada at ICLR 2026. The world’s premier representation-learning conference ran in Rio de Janeiro April 23-27, and Canadian institutions played outsized roles.

  • Mila contributed 70 affiliated papers. Vector contributed 48 papers and co-organized 6 of the 40 workshops. Combined: 118 Canadian-affiliated papers, putting Canada among the top national contingents at the conference.

  • Three Canadian-affiliated researchers sat on the Outstanding Paper Committee, which selects the conference’s top recognitions. Chair Gautam Kamath (UWaterloo / Vector). Doina Precup (McGill / Mila / Google DeepMind). Murat Erdoğdu (UofT / Vector).

  • Highlight Canadian-led papers: Jeff Clune‘s “Darwin Gödel Machine: Open-Ended Evolution of Self-Improving Agents” (UofT / Vector); Sanja Fidler‘s “Lyra” and “ChronoEdit” (UofT / Vector / NVIDIA); Yoshua Bengio‘s “Latent Veracity Inference for Identifying Errors in Stepwise Reasoning” and “FALCON: Few-step Accurate Likelihoods for Continuous Flows” (Mila); Anna Goldenberg‘s portable representations for clinical time-series with LLMs (SickKids / Vector); Nicolas Papernot‘s “Mitigating Privacy Risk via Forget Set-Free Unlearning” (UofT / Vector).

  • For a sector that is, fairly or unfairly, often described as great-at-research, bad-at-commercialization, this is the great-at-research half of the slide. The Cohere deal at the top of this issue is the other half catching up.

🏛 Policy

• BDC opened a $500M loan window for Canadian SME AI adoption with the launch of LIFT (”Lead with Innovation and Focus on Technology”) on April 24.

  • Loans up to $2M for software AI projects and $5M for physical AI / robotics, at a 2.25% interest rate that matches the Bank of Canada overnight rate, with up to two years of principal deferral. SMEs that pick a Canadian AI vendor get a preferential rate.

  • Mandatory expert-advisor consultations bundled in. BDC COO Véronique Dorval cited internal research showing only 30% of Canadian SMEs used AI in 2025, but adopters were 24% more productive than non-adopters. Co-endorsed by Ministers Solomon and Joly. Targets 1,000+ Canadian SMEs.

  • This is the first major federal capital deployment under the post-budget AI strategy. The SCIP $890M sovereign compute procurement (Issue 10) was supply-side. LIFT is demand-side. Worth tracking who actually draws.

• Vivacity Technologies (Kamloops, BC) received NRC IRAP Defence Industry Assist funding on April 21 to develop a sovereign AI document classification and redaction platform.

  • Dual-use: ATIP / privacy work plus classified-information sharing for the Canadian Armed Forces. Vivacity’s existing client base includes First Nations organizations.

  • Defence AI keeps showing up in non-Ottawa places. We’ve now tracked defence AI deals in Calgary (Issue 7), Vancouver Island (Issue 8), Saskatchewan (Issue 7), Edmonton (Issue 9), and now BC interior. The defence-industrial map is genuinely national.

• Manitoba moved to ban under-16s from social media and AI chatbots when Premier Wab Kinew announced the policy at an NDP fundraiser on Saturday April 26.

  • First province to specifically include AI chatbots in such a ban, modelled on Australia’s social-media age law (~$48.8M CAD non-compliance fines).

  • Aligns with the Liberal Convention’s chatbot-protection vote (Issue 9). When two parties from very different parts of the political spectrum land in the same place, legislation is usually closer than it looks.

📊 Data

• Express Employment / Harris Poll released a new Canadian AI workforce survey on April 22.

  • 79% of Canadian job seekers and 77% of hiring managers say employers should formally train staff on AI. AI use among Canadian companies climbed from 52% (2023) to 54% (spring 2025) to 63% in this wave. 19% report regular use.

• The Hub editorial board argued on April 22 that Canada’s 12% AI adoption rate is dangerously low.

  • The piece weaves together StatsCan’s 12% AI integration figure, KPMG’s 24% training figure, RBC’s “imagination gap” research, and PwC’s $3.65T-by-2035 accelerated-adoption scenario.

  • There’s a useful tension between this 12% stat and the Express / Harris 63% number above. They’re measuring different things: one is “deep integration into operations,” the other is “any use at all.” The gap between the two is exactly where BDC’s LIFT program is aimed.

In brief

• StackAdapt CEO Vitaly Pecherskiy sat down for the BetaKit Podcast on April 20 to detail how Toronto-based StackAdapt (~US$500M revenue, US$100M+ earnings, ~1,600 employees across 20 countries) shifted from a media-buying tool to an AI-first martech and adtech orchestration platform. One of the largest profitable private tech companies in Canada that nobody talks enough about.

• Cohere co-founder Nick Frosst got an AFP profile distributed alongside the Aleph Alpha announcement on April 24. The pull quote: “If the industry gets it right, AI will be boring.” Frosst frames Cohere as the only major AI provider exclusively focused on enterprise and government, with North able to run air-gapped. Companion read to the lead story.

• Quill Inc. CEO Fatima Zaidi wrote a sharp BetaKit op-ed on April 21 about almost hiring an AI-generated job applicant. The red flags her team caught are practical reading for any Canadian SMB interviewing remote candidates in 2026.

📅 Upcoming Events

• The AIA (Montréal) — May 5, 2026

• Upper Bound (Edmonton) — May 19–22, 2026 (Sold out. 8,000+ attendees.)

• Canadian AI Conference 2026 (Vancouver) — May 25–29, 2026

• ALL IN Toronto — May 28, 2026

• ALL IN Main Event (Montréal) — September 16–17, 2026

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

— Raif Barbaros

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 sovereign compute went from policy document to active procurement. Ottawa opened the $890M bidding war for a national AI supercomputer, and gave applicants until June 1 to submit plans. Meanwhile, Minister Joly took 100+ Canadian companies to Hannover Messe and NGen wrote another $62.7M in cheques for AI manufacturing projects. On the startup side, a Vancouver healthtech landed Mayo Clinic as a backer, an Ottawa chip startup’s $92M exit surfaced via SEC filing, and Mila launched a bootcamp to turn researchers into founders. UBC researchers published a paper in Science warning that AI swarms could quietly hijack elections. Not the biggest week for new deals, but the infrastructure play got very real, very fast. Let’s get into it.

💰 Deals & Milestones

• ViewsML (Vancouver) closed $4.9M CAD in seed funding to build the world’s first virtual biomarker library.

  • AI models that derive biomarker insights from pathology images without lab staining. Turning a slow, expensive, tissue-destroying lab process into software.

  • Led by Wittington Ventures (of the Weston family, owners of Loblaw and Shoppers Drug Mart). Backed by Mayo Clinic, Continuum Health Ventures, RiSC Capital, Debiopharm, Defined, and eFund.

  • CEO Kenneth To: ViewsML is building “the computational layer for next-generation diagnostics.” The pitch: analyze biomarker staining in minutes rather than days or weeks.

  • Wittington backing consecutive AI healthcare and AI science bets (they also led Shakudo‘s Series A2 in Issue 2). Mayo Clinic lending clinical credibility from day one. Vancouver’s deep-tech corridor keeps producing.

• Hyperlume (Ottawa) acquired by Credo Technology for $92M USD in cash. Price revealed this week via SEC 10-Q filing.

  • Built microLED-based optical interconnects for AI data centres. Had raised a $12.5M seed just seven months earlier from BDC Deep Tech, ArcTern Ventures, Intel Capital, LG, SOSV, and MUUS Climate Partners.

  • Founders Mohsen Asad (now Credo’s Senior Director of Core Technologies) and team stay in Ottawa. Seven technical roles currently open.

  • $12.5M seed round. $92M exit. Likely a 2xish return for the investors. A seven-month timeframe will make for a killer IRR, but it still adds to a growing list of Canadian chip startups absorbed by US acquirers before they scale domestically. CentML, Tenstorrent, Untether AI, now Hyperlume. The talent stays (for now), but the cap table leaves.

• NorthX (BC) invested $2.2M in three BC wildfire-tech startups: Crwn.ai, Nova, and Skyward Wildfire Technologies.

  • BDC-funded wildfire-tech accelerator putting follow-on capital behind its graduates. Canada builds AI for the problems it actually has: wildfires.

• Mistral Venture Partners expanding to Alberta with a full-time Calgary hire, backed by Alberta Enterprise Corporation investing $7.5M into the firm’s $75M fifth fund.

  • Yes, that’s us. Yes, that’s yours truly quoted in the article. Yes, we closed our fifth fund last year. Yes, AEC invested. Yes, we hired someone who will live in Calgary. No, I can’t tell you who (not yet).

  • Yes, I’m super excited about the person joining our team, and I’m super excited about Alberta!

  • Our fund is focused on AI in the enterprise, pre-seed to seed, in Canada. If you’re building, let’s talk!

• PrairiesCan announced $8.4M for seven Edmonton-area businesses focused on AI and automation in manufacturing and homebuilding.

  • Akash Homes received $1M to incorporate AI into homebuilding operations. Weldco-Beales funded for automated welding. Flexxaire received $3.4M across two phases for warehouse automation.

  • Funding comes via the Regional Tariff Response Initiative. The framing here is interesting: AI adoption as a response to US tariff pressure. When trade gets harder, automation gets more urgent.

🏢 Large Company / Big Tech

• Bell (Montréal) broke ground on a new AI data centre in Kamloops, BC, at Thompson Rivers University.

  • Third BC facility in Bell’s AI Fabric network, joining the Rimouski sovereign AI factory (Issue 6) and the $1.7B Regina facility (Issue 6). Bell is steadily stitching together a coast-to-coast sovereign compute backbone.

  • Meanwhile, for the first time in ten issues, Shopify didn’t make the newsletter. The streak ends at nine. Someone check on Shopify HQ.

🔬 Research

• Mila (Montréal) launched the Venture Scientist Bootcamp, a new full-time program to turn STEM researchers into AI-native founders.

  • Four months in Montréal. $10K stipend per founder. Direct coaching, plus access to Mila’s network of 1,500 AI researchers.

  • Part of the broader Mila Ventures push alongside the $125M Venture Scientist Fund with Inovia. Stéphane Marceau, Managing Director of Mila Ventures: “The next generation of category-defining companies will be built by founders who can fuse their deep scientific expertise with advanced AI.”

  • Canada has 10% of the world’s top AI researchers but commercializes a fraction of that output. This program is a direct attempt to fix that pipeline. Applications close April 26.

• UBC researchers published “How malicious AI swarms can threaten democracy” in Science, one of the world’s top journals.

  • Led by UBC computer scientist Kevin Leyton-Brown. Co-authored with Nobel laureates Nicholas Christakis and Maria Ressa, plus Nick Bostrom, Gary Marcus, Gordon Pennycook, and others. That’s an all-star author list by any measure.

  • The paper warns that hyper-realistic AI personas can infiltrate online communities and steer public opinion at scale, creating false consensus. Unlike traditional bots, these agents coordinate instantly, A/B test messaging in real time, and maintain consistent narratives across thousands of accounts.

  • Leyton-Brown: “A likely result is decreased trust of unknown voices on social media, which could empower celebrities and make it harder for grassroots messages to break through.” Published in the same week a House of Commons committee called for mandatory AI content labelling (see In Brief below). The timing is not coincidental.

• McGill researchers developed SIDISH, an AI tool that identifies the specific cells driving aggressive cancers. Published in Nature Communications.

  • Tested across pancreatic, breast, and lung cancers. The key innovation: it bridges single-cell data with patient outcomes, a long-standing bottleneck in cancer research. Can also simulate how high-risk cells respond when specific genes are turned on or off, predicting drug targets before lab testing.

  • Senior author Jun Ding (McGill/RI-MUHC): “In the long term, it has the potential to fundamentally change how new drugs are discovered.”

  • Between ViewsML’s virtual biomarkers and McGill’s cancer cell identification, Canadian AI in precision medicine had a good week.

🏛 Policy

• Ottawa launched the AI Sovereign Compute Infrastructure Program (SCIP): up to $890M over seven years to build a national AI supercomputer on Canadian soil. BetaKit | The Logic

  • Applications opened April 15, close June 1. Restricted to Canadian non-profits and post-secondary institutions, or consortia led by them. Applicants must integrate Canadian tech and partner with Canadian startups. Must show “significant service delivery” within 18 months of selection.

  • Part of the $2.4B Sovereign AI Compute Strategy. Queen’s University and SFU announced a joint bid with Bell Canada. U of T and UWaterloo widely expected to bid. The Digital Research Alliance is circling.

  • This is what we’ve been tracking since Issue 1. The sovereign compute MOUs (Issue 1), the $300M Public Compute Fund (Issue 6, “heavily oversubscribed”), the Budget 2025 allocations (Issue 7). All of it was table-setting for this moment. The money is now on the table. The question is whether the winning consortium can actually deliver world-class compute, on time, on Canadian soil.

• Alberta’s data centre wars continue.

  • Synapse refiled its application for the 1.4-gigawatt, $10B AI data centre campus near Olds after the AUC closed the original for incompleteness. A town hall drew ~150 residents, including one who brought her daughter’s stuffed animal to illustrate how close the facility would be.

  • Kevin O’Leary’s $70B Wonder Valley campus near Grande Prairie was confirmed exempt from provincial environmental impact assessment, though it still needs water, emissions, noise, and land-use permits.

  • A new analysis found Alberta accounts for roughly 93% of Canada’s planned data centre capacity, despite its grid being about five times more carbon-intensive than the national average. That’s the tension in one stat: Canada needs the compute, Alberta has the land and energy, but the emissions math is hard to square.

• NGen announced $62.7M for 14 advanced manufacturing projects focused on AI, robotics, and digital twins. Announced at Hannover Messe by Minister Joly.

  • ~$25M in federal funding plus $38M from industry partners. Named projects include Magna/Sarcomere Dynamics (advanced robotics and digital twin integration), MDA Corporation (AI-enabled satellite production line), and Materia Bioworks (AI-powered materials informatics).

  • This is the second NGen manufacturing-AI announcement in three issues (following the $79.5M in Issue 8). Magna being in the mix again signals serious industrial players see this as near-term operational, not science project.

  • Joly led 100+ Canadian companies to Hannover Messe, the world’s largest industrial trade show. Canada showing up in Germany with a manufacturing AI delegation, the same week the Cohere/Aleph Alpha merger talks continue to develop, is not lost on anyone.

📊 Data

• Deloitte’s 2026 State of AI in the Enterprise report landed with a finding that should matter to every AI vendor selling into Canada: 76% of Canadian organizations now factor the location of AI development into vendor selection, and 81% view sovereign AI as at least moderately important to strategic planning.

  • That’s not a policy aspiration. That’s a procurement signal. If you’re building AI for Canadian enterprises, where your models are trained and hosted is now a buying criterion, not a nice-to-have.

  • This ties directly to everything we’ve been covering: Cohere’s sovereign positioning, the TELUS Sovereign AI Factory, Bell’s AI Fabric, the SCIP procurement. Supply, meet demand.

In brief

• House of Commons Heritage Committee released a report with 13 recommendations on AI and the cultural sector, calling for mandatory labelling of AI-generated content via metadata, watermarks, or other technical solutions. Also recommended opt-in consent for copyrighted works used in AI training. Most witness testimony expressed “profound concerns” about AI threatening creative industries.

• Cohere (Toronto) had a busy week in the press. BetaKit published a behind-the-scenes Q&A on the Transcribe model with head of multimodel division Cassie Cao (our lead story in Issue 7). Separately, CEO Aidan Gomez sat down for a new interview saying Cohere is in its “takeoff phase” and discussing the merits of an IPO. Between the Aleph Alpha merger talks (Issue 9), the Pineau HQ pledge, and now IPO signals, Cohere’s 2026 is shaping up to be a defining year.

  • (Disclosure: Cohere is a portfolio company.)

📅 Upcoming Events

• SASK AI EXPO (Saskatoon) — April 27, 2026

• The AIA (Montréal) — May 5, 2026

• Upper Bound (Edmonton) — May 19–22, 2026 (Sold out. 8,000+ attendees.)

• Canadian AI Conference 2026 (Vancouver) — May 25–29, 2026

• ALL IN Toronto — May 28, 2026

• ALL IN Main Event (Montréal) — September 16–17, 2026

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

— Raif Barbaros

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 Canadian AI went international. Cohere surfaced in advanced merger talks with Germany’s Aleph Alpha. Motorola acquired Toronto’s Hyper, a 911 AI startup that went from stealth to exit in under a year. Montréal’s Hypertec became NVIDIA’s first Canadian OEM partner. The Bank of Canada convened the Big Six to discuss whether Anthropic’s latest model is a cybersecurity threat (I have thoughts). Scotiabank became the fourth Big Five bank to launch an enterprise AI platform. And Shopify shipped an open-source AI Toolkit that hands full store control to AI agents. Let’s get into it.

💰 Deals & Milestones

• Cohere (Toronto) is in advanced merger talks with Germany’s Aleph Alpha, per Germany’s Handelsblatt, confirmed by BNN Bloomberg.

  • Combined entity headquartered in both countries. The German government supports the deal and would become an anchor customer. Neither company has officially confirmed. Ties directly into the Canada-Germany Sovereign Technology Alliance signed in February.

  • Cohere is roughly 3x the size (~1,000 employees vs ~350 per LinkedIn). And while Aleph Alpha was once hailed as Europe’s answer to OpenAI, it abandoned its own model development in late 2024, pivoting to an “AI operating system” after CEO Jonas Andrulis acknowledged that just having a European LLM wasn’t a viable business model. I can see how their pivot can complement Cohere.

  • (Disclosure: Cohere is a portfolio company.)

• Hyper (Toronto) acquired by Motorola Solutions. Stealth to exit in under a year.

  • Agentic AI voice technology to screen non-emergency 911 calls. Emerged from stealth less than a year ago with a US$6.3M seed led by Toronto’s Ripple Ventures. Handles 100+ non-emergency scenarios in 30+ languages.

  • Clients included Toronto Police Service, Manitoba police, and San Diego County Sheriff’s Office. All 18 employees join Motorola. Co-founders Ben Sanders (ex-Clearco) and Damian McCabe (ex-Connected/ThoughtWorks) are Canadian repeat entrepreneurs. Company originated in the Yukon.

  • Stealth in 2025, seed round, paying clients across two countries, acquisition by a $70B public company. In under a year. That’s a tempo worth paying attention to.

• Hypertec (Montréal) became NVIDIA’s first Canadian OEM partner for AI servers, through its Ciara division.

  • Pre-release access to NVIDIA products, direct engineering collaboration, and marketing/sales support. Hypertec will manufacture NVIDIA-Certified AI systems domestically. Bell Canada has already selected Hypertec for five new BC data centres.

  • CEO Simon Ahdoot: “Canada can take a bigger slice of sovereign revenue.” Canadian-made NVIDIA AI servers, manufactured in Canada, for Canadian data centres. The physical layer just got more Canadian.

• Soma Energy (Vancouver) emerged from stealth with $7M USD for AI-powered data centre energy optimization.

  • Seed led by Category Ventures with Haystack, RRE Ventures, TO VC, Uncork Capital; Panache Ventures at pre-seed. Founded by ex-AWS energy leaders. Already optimizing 2 GW of electricity across 5 data centre customers. 18 employees.

  • As data centres keep getting bigger, someone has to optimize the power. Soma is betting it can be the intelligence layer for all of it.

• Sonibel (Vancouver) raised $1.6M USD pre-seed for AI welding defect detection.

  • UBC graduates built a machine learning model that identifies weld defects in real-time via acoustic sensing. A proprietary sensor mounts on the welding torch and listens for defect signatures.

  • Led by Maple VC with Champion Hill Ventures and Dorm Room Fund. First paid pilot is a Fortune 100 company. AI that listens to a weld and tells you if it’s good. Canadian deep-tech at its most practical.

• Harmix (Toronto) raised $1M USD, pivoting from music AI to AI agents for SMBs.

  • Originally a multimodal AI company with patented music/image/video search technology (clients: Red Bull, Disney, Warner Brothers). Now building “PAM,” a proactive AI manager for SMBs using agents to solve software fragmentation across Google Drive, Slack, and other tools.

  • CEO Nazar Ponochevnyi is a Vector Institute graduate researcher. ~20 employees. The original music search business remains profitable.

🏢 Large Company / Big Tech

• Shopify (Ottawa/Toronto) launched an open-source AI Toolkit that hands full store control to external AI agents. Also on GitHub.

  • Free, MIT-licensed. Connects Claude Code, OpenAI Codex, Cursor, Gemini CLI, and VS Code directly to the Shopify platform. First time a major e-commerce platform has handed full operational control of a live store to external AI coding agents.

  • Ships with 16 skill files covering admin, products, themes, Hydrogen storefronts, Functions, and partner tools. Live documentation access, real-time code validation, and store operation execution through CLI.

• Scotiabank (Toronto) launched Scotia Intelligence, an enterprise AI platform integrating capabilities, governance, and infrastructure.

  • Key component: Scotia Navigator for assistive AI. AI already handles 40%+ of client queries in contact centres. In commercial banking, AI processes ~90% of commercial emails for routing. First Canadian bank with a dedicated Data Ethics team.

  • Fourth Big Five bank to make a major enterprise AI announcement: RBC (Issue 2), TD (Issue 3), BMO (Issue 7), now Scotiabank. CIBC, you are now officially the last one standing.

• Microsoft Canada detailed the implementation phase of its $19B CAD cloud and AI infrastructure commitment with a “Community-First approach” for Ontario data centre expansion.

  • Five principles: no electricity price increases for Canadians, full cost coverage for grid upgrades, water stewardship, energy-efficient design, and workforce development. Invest Ontario welcomed the investment, supporting 1,250 jobs.

🔬 Research

• Mila and Sweden’s RISE Research Institutes signed a landmark MOU for AI collaboration in forestry, mining, and energy.

  • Joint Steering Committee established. Mila CEO Valérie Pisano: “We are focusing AI development on critically strategic domains like our forests, mines, and energy systems.” Swedish royalty visited Mila for the signing.

  • Between the Mozilla partnership (Issue 7) and now RISE, Mila is quietly building a web of international AI research alliances anchored in open-source and sovereignty. Worth watching.

• UWaterloo received $250K from Princess Margaret Cancer Centre for “MedDataOS,” a multi-agent AI framework for biomedical data analysis on head and neck cancers. Professor Ana Crisan (Cheriton School of Computer Science) is leading.

• McGill Office for Science and Society published a detailed investigation into “AI psychosis,” the phenomenon where sycophantic AI chatbots reinforce delusional thinking. Tests conducted April 7-9 on Gemini and Claude.

🏛 Policy

• Bank of Canada convened the Big Six banks and regulators to discuss cybersecurity risks from Anthropic’s Claude Mythos Preview model, which can identify and exploit software vulnerabilities.

  • The CFRG brought together Canada’s Big 6, Desjardins, OSFI, Department of Finance, and TMX Group. Meeting followed a similar US session called by Treasury Secretary Bessent. OSFI said it won’t issue short-term guideline changes but is in “active conversations.”

  • My take: I’m skeptical about the severity narrative. Anthropic has a pattern of being dramatic about its own models’ capabilities to drive attention and demand. If Mythos is truly as dangerous as claimed, how does limiting access to 12 companies meaningfully contain the risk? And is anyone suggesting no other lab has similar capabilities? Mythos sounds like another impressive step toward AGI-level reasoning. The cyber risk is real. The apocalyptic tone probably isn’t.

• Liberal Convention voted to restrict AI chatbots for minors under 16 at the party’s national convention in Montreal (4,500 delegates).

  • Two non-binding resolutions: (1) age of 16 for social media; (2) a Quebec-originated resolution to limit “all AI chatbots and other potentially harmful forms of AI interaction” to Canadians over 16. McGill’s Taylor Owen warned the upcoming Online Harms Act must include AI chatbots, citing the Tumbler Ridge case. Not binding on cabinet, but signals where the party base is heading.

• AI in Canadian law enforcement made headlines twice this week.

  • RCMP AI-drafted police reports: The RCMP is piloting Axon’s Draft One AI software across 10 detachments (8 in BC, 2 in Alberta) to auto-generate draft incident reports from body camera audio. $200,000 budget, ~800 reports generated, ~380 officers participated. Officers must change a minimum 10% of any AI draft. Professor Christopher Schneider (Brandon University) raised concerns about AI “hallucinations” in court evidence.

  • Edmonton Police AI facial recognition: CBC obtained documents via ATIP on Edmonton Police Service’s AI facial recognition bodycam pilot (~50 officers, December 2025). Facial recognition model supplied by Corsight AI. A “critical fault” system outage during the pilot. Privacy assessment submitted only the day before cameras went live. Watchlist of ~7,000 people. Kate Robertson (U of T Citizen Lab) called it “likely the most high-risk algorithmic surveillance program I have observed to date in Canada.”

In brief

• Google launched AI Mode in Canada, one of the first countries outside the US to receive it. Uses a custom Gemini 2.5 model. Agentic restaurant booking also expanded to Canada.

• Environment Canada announced a hybrid AI weather model. Six-day forecasts as accurate as current five-day. 8 to 24+ hours earlier detection of major weather systems. Practical, tangible, affects every Canadian. More of this, please.

• Alberta’s AI data centre wars continue. Synapse reapplied to the AUC for a 1.4-gigawatt facility in Olds designed for AI hyperscalers. Meanwhile, Wonder Valley, the $70B data centre park in Grande Prairie backed by Kevin O’Leary Ventures, was deemed exempt from environmental impact assessment.

• Shared Services Canada updated its federal AI strategy, detailing CANChat, a GenAI chatbot for public servants powered by GC LLM, a Canadian-trained large language model.

• Budget 2025 SR&ED changes could supercharge Canadian hard tech and AI hardware startups, allowing companies with physical footprints to reclaim R&D investments more effectively.

• Sorintellis, UdeM, Université Laval, and IVADO announced a collaboration for AI-powered clinical trial intelligence. Mila researchers building recommendation engines spanning reinforcement learning, causal inference, and medical ML. Montréal’s pharma-AI pipeline keeps growing.

• Edmonton’s Sarcomere Dynamics and NTWIST are among the companies tapped for NGen’s $79.5M AI-manufacturing investment (Issue 8). Sarcomere is deepening its work with Magna on AI robotics for automotive production. Good to see Edmonton getting its share of the NGen pie.

📅 Upcoming Events

• ALL IN Vancouver — April 15, 2026

• SASK AI EXPO (Saskatoon) — April 27, 2026

• The AIA (Montréal) — May 5, 2026

• Upper Bound (Edmonton) — May 19–22, 2026 (Sold out. 8,000+ attendees.)

• Canadian AI Conference 2026 (Vancouver) — May 25–29, 2026

• ALL IN Toronto — May 28, 2026

• ALL IN Main Event (Montréal) — September 16–17, 2026

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

— Raif Barbaros

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 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.

📅 Upcoming Events

• ALL IN Vancouver — April 15, 2026

• SASK AI EXPO (Saskatoon) — April 27, 2026

• The AIA (Montreal) — May 5, 2026

• Upper Bound (Edmonton)— May 19–22, 2026

• ALL IN Toronto — May 28, 2026

• Canadian AI Conference 2026 (Vancouver) — May 25-29, 2026

• ALL IN Main Event (Montreal) — September 16-17, 2026

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

— Raif Barbaros

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.

📅 Upcoming Events

• N³ Summit (Toronto) — March 31 – April 1, 2026

• ALL IN Vancouver — April 15, 2026

• The AIA (Montreal) — May 5, 2026

• Upper Bound (Edmonton)— May 19–22, 2026

• ALL IN Toronto — May 28, 2026

• Canadian AI Conference 2026 (Vancouver) — May 25-29, 2026

• ALL IN Main Event (Montreal) — September 16-17, 2026

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

— Raif Barbaros

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.

• Two Canadian companies on the 2026 Thrive Top 50 AgTech list caught my eye for their AI applications.

  • 4AG Robotics (Salmon Arm, BC). Mushroom-harvesting robots. Just watch that robot pick mushrooms — I find it very soothing, excellent ASMR to fall asleep to.

  • BinSentry (Kitchener, ON). AI-powered feed inventory monitoring. Raised $50M USD Series C in Aug 2025.

• 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.

• BNN Bloomberg feature on how Canadian universities are developing AI skills.

🏛 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.

📅 Upcoming Events

• ALL IN Vancouver — April 15, 2026

• The AIA (Montreal) — May 5, 2026

• Upper Bound (Edmonton)— May 19–22, 2026

• ALL IN Toronto — May 28, 2026

• Canadian AI Conference 2026 (Vancouver) — May 25-29, 2026

• ALL IN Main Event (Montreal) — September 16-17, 2026

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

- Raif Barbaros

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 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

• Bell (Montreal) — teams up with Coveo to modernize digital services for Ottawa and provinces

  • Integrates Coveo’s AI-Relevance platform into Bell AI Fabric offerings

  • Helps modernize citizen services while keeping sensitive data within Canada

  • Latest milestone in Bell’s AI push alongside Cohere partnership and data centre network plans

• 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

• Thomson Reuters (Toronto) — CoCounsel AI platform surpasses 1 million users across 107 countries

  • CEO Steve Hasker and CFO Mike Eastwood emphasized “fiduciary grade” agentic AI for legal, tax, and compliance professionals

  • Differentiation strategy: trusted AI for regulated professions vs. consumer chatbots

• 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

• The National AI debate heats up

  • Schneier and Sanders’ Globe piece on why Canada needs its own sovereign AI (link) got picked up by Slashdot, igniting robust online debate (Does Canada need nationalized, public AI?)

  • Vass Bednar (Canadian Shield Institute) followed up in the Globe: Big Tech, digital AI and privacy

• “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

• Mila (Montreal) — launches national hackathon on AI safety for youth mental health

  • Partners: Bell, Buzz HPC, and Kids Help Phone

  • March 16-23 event tests safeguards for vulnerable contexts

  • Practical application of AI safety research to real-world harm prevention

📊 Data

• KPMG: Accelerating Canadian climate progress with AI

  • 68% of Canadian executives believe AI will have a net positive impact on climate over the next three years

  • Concrete use cases already delivering results are driving this optimism

In brief

• New Brunswick updates procurement rules after AI contract errors — practical lesson in AI vendor management

• OpenCanada analyzes Canada’s youth AI governance gaps

• McGill, UBC, and U of T leaders reflect on generative AI in higher education

📅 Upcoming Events

• ALL IN Vancouver — April 15, 2026

• The AIA (Montreal) — May 5, 2026

• Upper Bound (Edmonton)— May 19–22, 2026

• ALL IN Toronto — May 28, 2026

• Canadian AI Conference 2026 (Vancouver) — May 25-29, 2026

• ALL IN Main Event (Montreal) — September 16-17, 2026

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

— Raif Barbaros

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

• Yoshua Bengio elected co-chair of the independent international scientific panel on AI — Mila founder continues global AI safety leadership role

• BNN Bloomberg: More robots than cars — Canadian firm gears up for the next industrial revolution

• CUCAI — Canada’s largest undergraduate AI conference took place this past week

📅 Upcoming Events

• AI + Culture Summit

• All In Talks — Vancouver and Toronto expansion

• The AIA — Montréal

• Canadian AI Conference 2026

• All In Event

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

— Raif Barbaros

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

• KPMG Canada found that 72% of Canadian organizations lost up to 5% of annual profits to AI-driven scams last year.

  • 81% of businesses that experienced fraud faced AI-enabled attacks.

  • 7 in 10 were targeted more than once.

  • Types of attacks: AI-generated phishing emails/chats (60%), deepfake documents (39%) and voice–clone executive impersonation calls (24%).

🏛️ 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.

  • Three days of hands-on exploration into how AI can accelerate scientific discovery.

  • The kind of research-to-application pipeline that keeps Toronto in the global AI conversation.

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

  • Human-in-the-loop agent architecture.

  • Proven effective on Canadian networks; now being trained to detect Russian narratives in Russian for European deployment.

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

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

• OpenAI and the Tumbler Ridge crisis. Shooter was an OpenAI user. OpenAI closed his account due to misuse related to violence planning. But OpenAI never came to the Canadian authorities until after the shooting. Ottawa summons OpenAI.

• 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 👋

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.

• Sovereign AI data centre proposals due Saturday Feb 15. ISED wants proposals for centres exceeding 100MW. No funding committed — MOUs only.

In brief

• Vector Institute hosting its third annual Remarkable conference Feb 19-20 in Toronto. Sessions on agentic AI, privacy, and LLM frontiers with Layer 6, Accenture, Linamar.

• 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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