Canadian AI: Cohere goes transatlantic, BDC opens a $500M AI loan window, and Manitoba moves on chatbots.
And more on $70M for failed-drug-resurrection AI, Canadian leadership at ICLR, and the AI candidate that almost got hired.
Good morning! Welcome to the Canadian AI Newsletter, a weekly rundown for founders, operators and investors.
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I am Raif Barbaros, Partner at Mistral Venture Partners. Views are my own.
This was the week 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
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— Raif Barbaros