Good morning! Welcome to the Canadian AI Newsletter, a weekly rundown for founders, operators and investors.
Was this forwarded to you? Subscribe below.
I am Raif Barbaros, Partner at Mistral Venture Partners. Views are my own.
ALL IN, the AI conference by Scale AI, took place in Montréal last week, with Germany as country of honour. The organizer put attendance at 10,000. I spent both days there. The size of the crowd and the energy in the halls matched where the AI wave is right now. Canada and Germany committed up to $300M to Yoshua Bengio’s LawZero, Cohere and Aleph Alpha finalized their merger terms, and Mila’s offices were vandalized the night before the conference opened. Radical Ventures closed the largest venture fund in Canadian history, Altis Labs raised US$25M, and Toronto’s Thri5 raised a seed round we co-led. Also in this issue: Shopify’s ads deal inside ChatGPT, a Montréal benchmark that stumps coding agents, and OpenAI’s bid to move the Tumbler Ridge suits to BC. Let’s get into it.
💰 Deals & Milestones
Altis Labs (Toronto) raised US$25M in a Series A co-led by OrbiMed and Qiming Venture Partners USA, announced September 17.
Altis builds AI endpoints for cancer trials. Its IPRO model predicts survival from routine radiology scans; in a post-hoc analysis of Johnson & Johnson’s MARIPOSA trial, it detected a treatment effect 11 months before the progression-free survival readout. Innovation Endeavors, Benchstrength, Fusion Fund and Lumira participated.
Thri5 (Toronto) raised US$5.4M in a seed round co-led by Whitecap Venture Partners and yours truly; the round closed in July and was made public last week. (Disclosure: Thri5 is a Mistral portco.)
We started Loblaw Digital together with Thri5 founders Jeremy Pee and Herman Paek. Pee later served as chief digital and technology officer at Marks & Spencer, and Paek ran Kijiji Canada. Thri5 turns retail data into daily actions for store, warehouse and head-office staff and tracks whether they get done. MaRS IAF, N49P, Amar Varma and Farhan Thawar participated.
Orbits (Toronto and San Francisco) raised about US$2M in a pre-seed round from a16z Speedrun, N49P and Garage Capital, announced September 16.
They’re building an AI assistant for household logistics. Like a “Chief of Staff” for your family.
SyncraSys (Halifax) closed an oversubscribed seed round on September 15, 30% above target; the amount was not disclosed.
SyncraSys puts an AI layer over a building’s camera feeds to analyze incidents and write the alerts and reports. CEO Darren MacLeod co-founded Liferaft, the Halifax threat-intelligence company Securitas bought in March with US$15.3M in recurring revenue.
Radical Ventures (Toronto) closed the first US$1B-plus of the Radical Breakouts Fund on September 15, the largest venture fund ever raised in Canada.
The fund backs late-stage AI companies. LPs include CPP Investments, PSP, HOOPP, OPTrust, TD, BMO and CI Global Asset Management; the PMO put the target at $4B. Twelve companies are already in, including Jeff Dean’s Discovery Loop and chipmaker Etched. Radical wrote the first cheque into Cohere. Although Radical isn’t necessarily Canada-focused, it’s still great to have large growth funds in town, much needed in our ecosystem. (Disclosure: Cohere is a Mistral Venture Partners portfolio company.)
Beacon (Toronto) acquired Haize Labs, a New York startup that stress-tests AI agents before deployment, on September 17.
Haize co-founder Leonard Tang becomes VP of AI research, and his team forms Beacon’s applied research group. Beacon buys and runs vertical software companies and was valued at US$1.4B in June. It is the second Canadian buyer of a US AI team in a month, after SenseNet.
Polarity, a Waterloo-founded applied AI research lab, has been acquired by Wander, the US travel-tech company behind the WanderOS rental-operator platform.
Founders Shane Barakat, Alex Ungureanu, and Mihai Posea researched how coding agents search and navigate large codebases, and post-trained small models for customers inside their own infrastructure. The team joins Wander’s internal engineering group and will build specialized agents and custom-trained models into WanderOS. The founders sent us the story directly.
🏢 Large Companies
Cohere and Germany’s Aleph Alpha have agreed the terms of their merger and are seeking regulatory approval, CEO Aidan Gomez told The Logic on September 16.
The combined company keeps the Cohere name under Gomez, with headquarters in Toronto and Berlin and more than 1,000 employees. Aleph Alpha’s Ilhan Scheer becomes COO and Samuel Weinbach chief research officer. The deal was first announced in April. Gomez said Cohere’s models trail the frontier in coding and cybersecurity and that the company is “scaling up our models dramatically.”
The Globe reported on September 11 that Cohere is in advanced talks to raise US$2B to US$3B at a US$20B valuation.
Cohere and OpenText (Waterloo) will sell a joint agentic AI stack to governments and regulated industries, with availability in early 2027.
OpenText supplies the data and context layer for its 120,000-plus enterprise customers; Cohere supplies the models and its North platform. Joelle Pineau, Cohere’s chief AI officer, told the Globe there is “real appetite for solutions built outside the U.S.”
Shopify (Ottawa) is OpenAI’s first e-commerce partner for ChatGPT Ads, announced September 18.
A free Shopify App Store app syncs a merchant’s catalogue to ChatGPT and lets the merchant set a budget for labelled ads inside the chatbot.
Shopify also acquired Tailwind Labs on September 9, the Cambridge, Ontario maker of Tailwind CSS. Installs run 110 million a week, yet Adam Wathan said in January that AI coding tools cut documentation traffic 40% and revenue 80%; he laid off three of four engineers.
🔬 Research
Microsoft Research Montréal (with KAIST) built ProgramDistill, a benchmark where a coding agent is given a working web app with its source code hidden, a broken copy with features missing, and a browser, and has to figure out what the missing features do by clicking around and then rebuild them.
Main finding: across nine frontier coding agents, the best restored 49.2% of complete multi-step workflows when rebuilding a whole application and the second best 28.8%. Agents that reproduce one behaviour often fail to chain behaviours into a working flow, and success falls from 100% to 64% for the top agent as the number of missing features goes from one to eight. The pipeline generated 4,063 tasks from 26 apps with no human labelling.
So what: this is the job behind migration and rebuild-the-legacy-system pitches, which services firms are now quoting with agents in the loop. A public release is in progress.
Mila and DFKI, Germany’s national AI research centre, signed a strategic partnership at ALL IN on September 16 covering agentic AI, AI safety, trustworthy systems and AI for energy, with researcher exchanges between the two.
🏛️ Policy
ALL IN 2026 ran September 16 and 17 at the Palais des congrès in Montréal.
Attendance was 2,300 in 2023, 4,000 in 2024 and 6,500 in 2025. Germany sent more than 50 executives with Minister Karsten Wildberger. The fifth edition is September 22 and 23, 2027.
On day one, hundreds of protesters marched on the venue under the banner “All Out Against All In.” Police in riot gear locked most of the doors, and we were asked to leave through an alternate exit. Police arrested a 19-year-old after a scuffle at the barricades. Radio-Canada reported the heavy police presence was a response to the vandalism at Mila the night before, covered below.
Canada and Germany will put up to $300M into LawZero, Yoshua Bengio’s Montréal non-profit, announced September 16: up to $150M from Canada’s Strategic Response Fund and €100M from Germany.
The money funds Scientist AI, a system designed to reason and answer without its own goals or the ability to act. Ottawa says the project will create 360 full-time jobs and build sovereign compute with Hypertec and 5C. Germany’s share is subject to European Commission state-aid notification and funds a Berlin office. LawZero launched in June 2025 with about US$30M in philanthropic money, has just under 50 staff, and is run by CEO Sam Ramadori.
Bengio told The Logic the team is building a prototype and is looking for more democracies and donors to join.
Mila‘s headquarters at Saint-Urbain and Saint-Zotique was vandalized late on September 15, the night before ALL IN opened.
Montréal police said about ten people broke windows around 11:45 pm and left graffiti reading “Burn the data centers” and “No.” Police questioned and released a 25-year-old woman. Bengio addressed it from the ALL IN stage the next morning: “Violence is not an answer to these risks and fears, which I can understand.”
Mila, Mozilla and Hypertec launched an open-source AI initiative on September 17 to build a foundation layer that organizations can run locally with full control of their data.
Terry Fox Research Institute (Vancouver) approved 14 project teams for $25M under its first Digital Health Innovation Fund, announced at ALL IN on September 16.
OpenAI asked a US federal court on September 18 to dismiss the Tumbler Ridge lawsuits, arguing the witnesses, records and public-policy questions all sit in British Columbia and the cases belong in BC courts.
📰 In brief
Thirty-seven Atlantic Canadian AI companies exhibited at ALL IN under a Digital Nova Scotia showcase funded by ACOA and the four Atlantic provinces; the company list spans health, energy, finance, manufacturing and cyber.
Platform Calgary named its 2026 Launch Party Top 10 on September 19, across agtech, fintech, cleantech, AI and legaltech; the companies present on November 5 during Calgary Innovation Week.
HIVE Digital’s BUZZ HPC signed Vancouver’s ProCogia on September 16 to run its LLM hosting and agent products on dedicated GPU capacity in BUZZ’s Canadian data centres.
A swarm of rogue OpenAI agents used a University of Toronto link shortener as a message board in June, Reuters and CBC reported September 18. U of T disabled the function and says no systems were breached.
OpenAI is giving free API credits and staff time to startups in Toronto-headquartered Creative Destruction Lab, which works with about 700 companies a year; no dollar value was disclosed.
Dates and watch items: the federal AI transparency consultation closes September 23. NeurIPS author notifications land September 24. Solomon told ALL IN the builder of Canada’s sovereign supercomputer will be named “early this fall”; no winner yet.
Thank you for reading! Subscribe, and please share any feedback 🙏🏽
— Raif