Canada Signals Shift Toward State Equity 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 likely represents the largest single equity commitment the Canadian government has ever made to a tech company.

While the government has historically provided support through loans, grants, and arm's-length Crown corporations like the Business Development Bank of Canada, this move signals a more direct approach to industrial strategy. BetaKit reports that the investment will be deployed in stages, requiring Cohere to provide regular reports regarding investments and jobs created within Canada.

In an interview with BetaKit, AI and digital innovation minister Evan Solomon explained that the Canada Development Investment Corporation negotiated the Cohere deal. Solomon further noted that a forthcoming $500-million Canadian Tech Growth Fund—originally announced as part of a broader AI strategy—will be designed to provide "flexible growth capital" and take equity positions in small and medium-sized firms to attract further capital. Solomon stated that this approach gives the government "a seat at the table to control and build this technology."

The move follows a pattern of identifying emerging technologies and critical minerals as national security priorities. BetaKit notes that the government recently announced plans to acquire a $400-million stake in Teck Resources, a critical minerals company, and previously authorized nearly $200 million CAD in repayable funds for the quantum firm Xanadu via the Strategic Response Fund. Industry minister Mélanie Joly previously described Cohere as a "Canadian champion" during the ALL IN conference last year.