Canada Pivots to Equity Stakes with Massive Cohere Investment

Prime Minister Mark Carney announced in Montréal that the Canadian federal government will invest up to $1.6 billion CAD in Toronto-based AI developer Cohere as part of a Series E funding round, as BetaKit first reported. According to BetaKit, this represents likely the largest single equity commitment the Canadian government has ever made to a tech company.

While federal support has historically relied on loans, grants, and repayable contributions—such as the nearly $200 million CAD recently authorized for quantum firm Xanadu via the Strategic Response Fund—the Cohere deal marks a move toward direct ownership. AI and digital innovation minister Evan Solomon told BetaKit that the investment, negotiated through the Canada Development Investment Corporation, allows the government to have a "seat at the table" to help build and control the technology.

Solomon further told BetaKit that this approach will extend to the $500-million Canadian Tech Growth Fund. Designed to provide "flexible growth capital," the fund will include facilities to take equity positions in small and medium-sized companies to attract further capital.

This shift aligns with a broader national security strategy announced today, which identifies emerging technologies and critical minerals as top priorities. BetaKit notes that this trend of government ownership is appearing globally, citing the U.S. government's 10 percent stake in Intel under President Donald Trump, as well as Canada's own planned $400-million stake in Teck Resources.