What is ‘sovereign AI' and why is it a priority for Canada in the age of Trump?
Countries with the resources and know-how to forge ahead on AI development and deployment are building AI factories, which are hubs that unite computing power (known as compute), data, researchers and companies to advance AI models and applications.
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'The AI factory will become the bedrock of modern economies across the world,' Jensen Huang, founder and chief executive of AI chip giant Nvidia Corp., said during a media Q&A in 2024.
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The European Union's InvestAI initiative launched in February will mobilize a 200 billion euro AI investment, with 20 billion euros of that reserved for AI gigafactories. At least 15 AI factories are expected to be operational in the EU in 2025 and 2026, including sites in Germany, Finland, France, Italy and Spain.
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Stargate LLC, the AI joint venture between OpenAI Inc., SoftBank Group Corp., Oracle Corp. and Metagenomi Inc., said it will invest US$500 billion in the coming years to boost the U.S.'s AI infrastructure and to 'secure American leadership in AI.'
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Canada, meanwhile, announced the Canadian Sovereign AI Compute Strategy in December 2024, which will dole out more than $2 billion over five years to support the domestic AI industry. About half of those funds are earmarked to build out the country's lagging computing infrastructure.
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Industry leaders and policymakers have for years lamented that while the foundations of AI have their roots in Canada, the country has largely failed to transform its early research lead into tangible economic benefits.
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The Mark Carney government said it aims to change that. It remains committed to Ottawa's sovereign AI strategy and has also made new promises, such as tax credits to help small businesses adopt AI and to integrate the technology into the public sector.
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So far, the federal government has only allotted up to $240 million to Toronto's Cohere Inc. to help the company invest in and buy AI compute at a new multi-billion-dollar Ontario data centre to be opened this year and operated by New Jersey-based cloud provider CoreWeave Inc.
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Evan Solomon, Ottawa's recently minted minister of AI and digital innovation, has said that building Canada's sovereign AI does not require every piece of the tech stack to be Canadian.
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CIGI's Araya argued the government should fund homegrown tech firms first.
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'I wouldn't go looking outside Canada for procurement, (as) it undermines our economic development over time,' he said. 'It also limits our capacity to know exactly how we're managing our data; a huge portion of our data has to go through U.S. infrastructure.'
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Solomon has also said Canada requires foreign partners, companies and capital to fulfil its vision of sovereign AI. He cited the need to work with the U.S., the United Kingdom, France and Germany, and has signalled that Saudi Arabia could be a potential investor in Canadian AI.
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Forging strategic alliances is key for Canada's long-term AI strategy, especially if the country can leverage its AI intellectual property (IP) to play from a position of power, said Daniel Wigdor, a University of Toronto computer science professor and the cofounder and chief executive of Axl, a venture studio that aims to build 50 AI companies over the next five years.
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He said the bulk of AI patents filed in Canada leave the country, with 75 per cent of them going to the tech giants, while only seven per cent of the remaining quarter are assigned to Canadian companies.
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'If we can start to recapture that … this strategy can pan out,' he said. 'But if we're just going to sell our stuff to the highest bidder and be dependent on them, there's a big danger in that.'
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What might sovereign AI look like in the future?
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Much of the current discussion on sovereign AI revolves around building AI data centre infrastructure and obtaining the energy and cutting-edge chips required to power them.
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It's a highly costly endeavour, with McKinsey & Co. Inc. estimating in an April report that companies in the compute value chain will need to invest US$5.2 trillion in data centres by 2030 to satiate global AI demand.
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Araya said Canada is right to invest in data centres, but needs to think beyond that.
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'We can't just say we'll take all our public tax dollars and put them into data centres,' he said. 'We've got to think about how we make more money. It's one thing to have the infrastructure in place, but we need the service economy that sits on top of that.'
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As GenAI models advance, some scholars and industry voices are advocating for an alternative vision of AI that is less power-hungry and more equitable over the bigger-is-better mentality espoused by Silicon Valley's AI giants.
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Sovereign AI, Wigdor said, doesn't just mean owning the data layer or developing large language models (LLMs).
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'If we're going to be spending Canadians' money to establish a sovereign AI play, it should be to leverage our lead in applied computing in AI — applying the technology to solve real-world problems — valuable to people and businesses, and let private industry pay for the rest,' he said. 'That's where we can leap ahead.'
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