Toronto-based generative artificial intelligence (AI) startup Cohere is helping to build a multibillion-dollar AI data centre in Canada with the support of the federal government.
The Government of Canada has finalized its investment of up to $240 million CAD into Cohere’s $725-million project to purchase AI compute at the new data centre to train some of its large language models (LLMs) in Canada.
Cohere is partnering with CoreWeave to build this facility, which is expected to come online in 2025.
This marks the government’s first investment through its recently unveiled $2-billion Canadian Sovereign AI Compute Strategy, which is aimed at ensuring the country’s AI sector has access to the infrastructure it needs. The strategy includes $700 million to finance the construction and expansion of commercial AI data centres in Canada.
The Government of Canada said that the new facility, which is expected to come online in 2025, will provide computing power to Cohere and other Canadian technology companies.
BetaKit has confirmed with Cohere that the company is partnering with American cloud computing firm CoreWeave to build this facility. Its exact location has yet to be determined, and no further financial details have been released at this time.
This investment is designed to help Cohere draw in additional private capital to support this project, in which Cohere is also expected to make a significant investment.
“The government is absolutely committed to providing the support that you need to attract private capital, to cut through any red tape that you are encountering in getting these data centres built,” then-Deputy Prime Minister and Minister of Finance Chrystia Freeland said during the press conference announcing the investment. Freeland, now transportation minister, resigned shortly after this announcement. Under new Prime Minister Mark Carney’s leadership, former innovation minister François-Philippe Champagne has replaced her as finance minister.
At the event, Cohere co-founder and CEO Aidan Gomez said that this new facility will use the latest graphics processing units from American chip giant Nvidia, one of Cohere’s investors.
“We’re proud the Canadian government is further investing in the AI industry to build a supercomputer in Canada,” a Cohere spokesperson told BetaKit over email. “This support will enable Cohere to continue to train and develop state-of-the-art AI technology that serves the needs of global enterprises.”
Some Canadian data centre operators have criticized the feds for financing a project led by CoreWeave. Cohere co-founder Nick Frosst recently told The Logic that the company chose CoreWeave through a competitive process.
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Founded in 2019 by former Google researchers, Cohere builds LLMs that power chatbots and other generative AI applications. Unlike some of its rivals, which include OpenAI, Anthropic, Mistral, and Google, Cohere caters exclusively to businesses.
Earlier this year, Cohere closed $500-million USD in Series D financing at a $5.5-billion valuation, making it one of Canada’s most valuable tech startups. Cohere’s backers include PSP Investments, Cisco, AMD, Export Development Canada, Fujitsu, Nvidia, Salesforce Ventures, and Oracle, among others.
In a letter to employees and investors this week, Gomez said the firm plans to focus on building more tailored models for businesses as companies struggle to figure out how to adopt generative AI.
“Cutting-edge infrastructure will allow us to train our next models here in Canada,” Gomez said during the press conference. “It’s crucial that we help Canada retain our world-class talent and our intellectual property by creating an environment where AI companies not only grow but thrive.”
UPDATE (03/21/25): This story has been updated to include additional detail regarding the scope of this project, recent political changes, and reactions.
Feature image courtesy Minister François-Philippe Champagne via X.