Canadian AI: $6.5B for a Calgary cooling company, another Vancouver acquisition and Canada's largest data centre to begin construction.
And more on agentic AI security, sovereign compute, and mushroom-picking robots.
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.
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
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- Raif Barbaros