Canadian AI: Two more VC funds, $57M from the gov't to AI startups and research, and Cohere had another big week.
PrairiesCan and FedDev fund 18 AI startups, Alberta launches Health Innovation Lab with Amii.
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
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— Raif Barbaros