Stopping the brain drain: U of T professor aims to launch 50 AI companies with new venture studio Axl

Globe and Mail

5 hours ago

Daniel Wigdor is a prime example of the problem he's trying to solve. He completed a computer-science PhD at the University of Toronto and promptly left the country to work for Microsoft Corp. in the United States. He returned home and later founded a company focused on human-computer interaction, but sold it to Meta Platforms Inc., another foreign tech giant.
Today, Mr. Wigdor wants to launch more Canadian technology companies, ensure the country benefits economically from the research coming out of publicly funded universities, and give talented entrepreneurs a reason to stay. 'Canada has been dramatically underperforming and failing to take up the incredible innovation happening here,' he said. 'With the right investment of community, of infrastructure, of capital and of innovation, we can really solve that problem.'
To that end, he has co-founded a venture studio called Axl that aims to launch 50 artificial-intelligence companies in the next five years. Mr. Wigdor, Axl's chief executive, expects at least half to fail within the first six months. (This is venture, after all.)
Broadly, Axl will identify business problems and task talented entrepreneurs to solve them with AI, while tapping into promising academic research. Axl recently closed a $15-million investment fund, with Mr. Wigdor as the lead investor. 'Because we can be so efficient, and because our tech team will be building the prototypes, I don't need a lot of money to get started,' he said.
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A computer-science professor at the University of Toronto, Mr. Wigdor has teamed up with fellow U of T prof Tovi Grossman, entrepreneur Ray Sharma and former Telus executive David Sharma to form Axl. Mining magnate Rob McEwen and Smart Technologies co-founder David Martin are also investors, among others.
Axl was ultimately born out of a 'trauma' of Mr. Wigdor's that dates back to Jan. 9, 2007. Like many people that day, he watched Steve Jobs unveil the iPhone, which proved revolutionary thanks to its touch-screen interface. The difference is that Mr. Wigdor watched on a multitouch computing device he built for his thesis at U of T. He didn't invent the technology, but Bill Buxton had worked on the concept in the early 1980s while at U of T. And now here was Apple's CEO, about to upend multiple industries with a technology that could be partly traced back to a Canadian university.
'The social contract that academics believe we have with society is that we're going to invent these technologies and write about them in papers and inspire people,' Mr. Wigdor said. 'The tragedy of it is the foundational technologies we're inventing in Canada are not accruing capital for Canada.'
The same pattern is playing out with AI. Emeritus U of T professor Geoffrey Hinton sold his company to Google and worked for the tech giant for years. One of his students, Ilya Sutskever, left Toronto and co-founded OpenAI. Another, Jimmy Ba, was among the first hires at Elon Musk's xAI.
Axl is based at the Schwartz Reisman Innovation Campus in Toronto, which also houses the Vector Institute, affording it access to the city's deep pool of AI and computer-science talent. 'We want to create Toronto as the centre of modern AI development, and getting these 50 companies created is going to have a massive ripple effect,' said Axl co-founder and chief growth officer David Sharma.
The AI world is increasingly dominated by a small number of extremely well-funded U.S. tech companies such as OpenAI, Google, Meta and Anthropic. But Mr. Wigdor argues that the real opportunity for Canada is not in the physical infrastructure that powers AI or in the large language models behind chatbots, but in developing applications that use AI to solve problems and 'empower people to do things they never could before.'
He likens the current state of AI to a Charlie Chaplin movie, whereas he wants to make Citizen Kane. 'People are looking at the current AI chatbots and thinking, that's what AI is,' he said. 'We'll help people to look further into the future.'
One idea Axl is pursuing is an AI agent for computer coding education called CodeAid. Instead of having the agent teach the student, the roles are reversed. The AI agent will be trained with knowledge gaps that the student has to fill in through teaching.
To source ideas, Axl will identify promising concepts from the research community. 'Often in academia, we sort of look down on having a commercial and immediate impact with our work,' said Mr. Grossman, who is also Axl's chief scientist. 'We really do believe you can do innovative work that is impactful.'
Axl is also partnering with Canadian corporations to learn about their operations and develop ideas for new AI applications. Axl will launch the company, with the possibility of the partner corporation becoming the first customer and an investor. Dillon Consulting is the first partner to be announced publicly, but Mr. Sharma said Axl also has arrangements in the legal and accounting industries.
However, even if Axl launches dozens of successful AI companies over the next few years, there is nothing stopping a foreign tech giant from snapping them up and siphoning away intellectual property.
Mr. Wigdor doesn't seem too vexed about that prospect at this stage. Acquisitions are necessary for entrepreneurs and researchers to gain the experience and the funds (or as he puts it, 'expertise and wealth among the geeks') to invest back into the Canadian tech ecosystem. 'I'm playing the long game,' he said. 'This is my retirement project.'