Canada takes stake in Cohere as CEO says it is the largest AI company outside the US and China

Canada is putting public money into the boardroom of its largest artificial intelligence company. The federal government said on Thursday it will invest up to $1.6 billion in Toronto-based Cohere, taking an equity stake of an undisclosed size in a move Prime Minister Mark Carney framed as a bid for "affordable, secure, sovereign AI, built in Canada for the benefit of Canadians".

Cohere chief executive Aidan Gomez said the deal leaves the company as "the largest AI company outside the United States and China". The firm says its client base has grown 20 times over the past year to 300 customers, with uptake in highly regulated industries including Aston Martin Aramco, RBC, Fujitsu and German submarine maker TKMS. Cohere has committed to creating 1,000 Canadian technology jobs and to investing $4 billion in research and infrastructure by the end of 2031.

The government has not disclosed what percentage of Cohere it will own, but AI minister Evan Solomon said the stake gives the government a say in the company's future. "This is a responsible investment done on favourable terms. This will give us a seat at the table," Solomon said, adding that sensitive Canadian data would stay in Canada under Canadian law. Cohere has also committed to keeping its headquarters in the country despite merging with Berlin-based Aleph Alpha earlier this year to build what the pair describe as a transatlantic sovereign AI offering.

Analysts cast the investment as a hedge against dependence on American and Chinese models. Sean Mullin, a senior fellow at Toronto's Munk School of Global Affairs and Public Policy, said Cohere will not displace the US giants but gives Canada and Europe an alternative, asking whether critical parts of future digital infrastructure should be run by models "entirely outside of our control". Keith Jansa, chief executive of the Digital Governance Council, welcomed Canada treating AI as critical infrastructure, but warned that developing models at home does not by itself deliver sovereignty: what matters is whether Canadian businesses and governments can control their data and switch providers without becoming locked in.

The government's wider push includes a $500 million growth technology fund aimed at small and medium-sized start-ups, which it will also use to acquire further equity stakes. Cohere's existing backers include NVIDIA, Germany's Schwarz Group and Bell Ventures, according to CB Insights.