The state may play a larger role in creating domestic “champions” after the Canadian government’s $1.6-billion investment in Toronto-based frontier AI developer Cohere, according to Finance Minister François-Philippe Champagne.
The news: At the Canadian Club of Ottawa on Monday evening, Champagne said that Canada taking equity stakes in general-purpose technology companies is “strategic,” and made it clear that the Cohere deal is an example the country is open to replicating.
The finance minister made the remarks in a fireside chat with Bloomberg’s Brian Platt as part of a speaking tour to promote the 2026 federal budget, set to be tabled on Thursday. Champagne was more tight-lipped about the budget’s contents in Ottawa compared to his appearance at the Canadian Club of Toronto that morning, where he teased that the budget will be all “about entrepreneurs.”
From the source: When Platt asked Champagne if the government is looking to take more equity stakes in companies, the minister said Cohere is “a poster child of what you want to do,” noting that other countries have supported their own AI champions.
“We’ve done it before in strategic industry to make sure that we have a leading position, and I see [the] state more involved in that,” Champagne said. “Because in some of these key industries which have a strategic value, scale matters, and you need to be there to support them to build these global champion[s], and I certainly believe that Cohere is one of them.”
The context: Champagne echoed what AI minister Evan Solomon told BetaKit after the Cohere deal last week. Solomon noted that the Canadian Tech Growth Fund, announced in Canada’s refreshed AI strategy earlier this year, will take equity positions in small and medium-sized companies.
Final thought: The federal government has also teed up a $25-billion sovereign wealth fund that’s set to take an equity stake in Canadian projects and companies alongside the private sector. At the event, Champagne said Canadians should be proud to support investments made by that fund in the same way they should be proud of the Cohere investment.
Reaction to the government’s Cohere investment has been mixed. Some industry experts are questioning whether the government should be picking winners in the first place and the opaque terms of the deal, while former Research in Motion co-CEO Jim Balsillie argued it undermines the imperative for strategic government investments.
Feature image courtesy Alex Riehl for BetaKit.