Canada announces digital sovereignty strategy to reduce dependence on foreign AI infrastructure.

When a single American hyperscaler can drop $100 billion on AI infrastructure in a single year, what is a middle power supposed to do? Canada's answer, delivered at Web Summit Vancouver this week by the country's first-ever Minister of Artificial Intelligence and Digital Innovation, is neither surrender nor a moonshot attempting to match U.S. spend dollar-for-dollar. Instead, it is a declaration of digital independence with the acknowledgment that independence does not necessarily mean isolation. "Sovereignty is not solitude," Minister Evan Solomon said in a press conference Tuesday morning at the Vancouver Convention Centre. "We are going to do business with the United States. They are our biggest customer." Solomon announced 44 new projects across British Columbia receiving up to $66 million through Canada's Compute Access Fund, a $300-million program launched in July that the minister says is "wildly oversubscribed." The fund subsidizes 50 cents on the dollar for compute access, rising to 67 cents on the dollar when that compute is Canadian.

Recipients of the Compute Access Fund include SenseNet, the Vancouver-based wildfire-detection company founded by a PhD student named Hamed Noori, who watched the 2018 BC wildfires choke the city with smoke and decided AI should solve it. SenseNet now operates in 11 countries with more than 30 patents. Also funded is Spare, which uses AI to optimize paratransit and public transportation routes in roughly 250 cities globally, including BC Transit and Translink, Vancouver's public transportation network. The overall project includes building new data centers in Canada at a time when data centers are becoming increasingly controversial over their power and water use. Mega projects like Kevin O'Leary's Utah-based 9 gigawatt data center face public scrutiny; O'Leary's project will receive an energy use tax reduction from the standard 6% to 0.5%, and the local authority will rebate 80% of the property tax back to O'Leary Digital.

Canada is approaching data center development differently. The day before the BC funding announcement, Solomon was at Canadian telco Telus's headquarters to announce an MOU for three new AI-focused data center sites in British Columbia designed around sustainability, featuring closed-loop water systems drawing waste rainwater from BC Place stadium plus heat reuse that essentially cools chips by warming homes. Solomon promised that power use would not increase electricity rates for ordinary people. "We should be very open to real citizens' concerns," Solomon said. "Technology moves at the speed of innovation and citizens move at the speed of trust. And you got to move at the speed of trust."

When pressed on how Canada competes when individual U.S. firms outspend the entire fund 300-to-1, Solomon outlined a four-part answer: talent, energy, capital, and partnerships. On talent, Solomon said that "Waterloo is graduating more engineers than Stanford" and that Canada's last budget put $1.7 billion into a talent attraction program targeting 1,000 of the world's top AI researchers and their labs, "the largest such program in the G7." On energy, Solomon noted that Canada has "the largest clean energy grid, lots of it unused, but the [largest] potential in the world." He emphasized that Hydro Ottawa has already deployed AI to manage its own grid more efficiently. "The best new energy is the energy that we're not already using," he said. On capital, Solomon acknowledged that "access to capital is a challenge in Canada" and that companies need access to capital from seed through Series B and beyond. One core strategy for competing is building partnerships to develop more options, including Canada's recent sovereign technology alliance with Germany.