MONTREAL — Canada made a show at this week’s G7 ministers meeting of joining forces with European allies to stave off U.S. technological dominance, as the push to reduce this country’s military and trade reliance on the United States extends to AI and quantum industries. 

Those new technologies are important to national security efforts in Europe, as countries look to integrate them in massive new defence investments, said Henna Virkkunen, the European Commission’s executive vice-president responsible for technological sovereignty and security. 

“We are encouraging our member states to use 10 per cent of the defence investments to these critical technologies, like AI, quantum, space technologies or cybersecurity technologies,” Virkkunen said in an interview with The Logic.

That mandate increasingly applies to Canada, as the only country outside of Europe to join the €150 billion Security Action for Europe (SAFE) procurement agreement to provide financial support to the defence industry. It’s part of the ReArm Europe plan to help the continent meet its NATO defence spending targets and reduce its dependence on U.S. technological and military might. Pacts like SAFE, which were born of increased NATO defence spending commitments, will help set new standards in both areas, said Virkkunen. 

As with defence, Virkkunen said the EU doesn’t want to be dependent on any one country for critical technologies like AI and quantum. “That’s why we are now building up our own capacity, but we also see that we can’t be competitive alone,” she said. 

There are parallels between Canada’s decision to join the procurement pact and a series of new digital co-operation agreements it signed at a meeting of G7 industry, digital and technology ministers in Montreal. Over the course of the two-day meeting, Canada inked deals on AI and quantum technology with the EU, Germany and the United Kingdom.

Canada’s bid for closer co-operation with Europe comes as lesser powers try to find their place in the AI race led by the U.S. and China. Under President Donald Trump, Washington is seeking what the White House describes as “unquestioned and unchallenged global technological dominance,” including by pushing the world onto American-made AI models and hardware. It also opposes international efforts to regulate the sector, and has tied co-operation with other countries on AI to investment in the U.S. 

Conspicuously, U.S. Commerce Secretary Howard Lutnick skipped the G7 meeting, and sent his undersecretary William Kimmitt instead. 

“Monopolization and aggressive subordination is [now] explicit U.S. trade and industrial policy,” said Vass Bednar, managing director of the Canadian Shield Institute, a think tank focused on economic sovereignty. “That’s what’s really spurring this renewed and refreshed co-ordination.” 

The G7 ministers in Montreal have carefully avoided calling out the diverging approach to AI in the U.S. Canadian AI Minister Evan Solomon instead emphasized the trust between Canada and its European allies—something he said is in short supply globally—as well as their shared resolve to balance innovation with safety.

His colleagues echoed the sentiment. “Outside the European Union, I can’t think of a partner that is more aligned with what we want to stand for than Canada,” Germany’s Digital Transformation Minister Karsten Wildberger said at a press conference.

Canada and Europe both lack the scale to compete internationally on their own, Wildberger said, but they shouldn’t be underestimated. “Joining forces, doing things together, gives us even more access to world-class talent, gives us even more access to scale,” he said. 

Canada’s digital alliance with Germany aims, among other things, to encourage and facilitate private partnerships between the two countries, added Wildberger, pointing to collaboration between German software giant SAP and Canada’s Cohere, which are jointly selling AI models and applications to businesses. 

The EU is also keen to bring Canada in on partnerships between its governments and research institutes to connect their digital infrastructure, so that researchers and startups on the continent have more of the compute they need to train and run advanced models. 

Last December, the bloc and seven of its member states committed €1.5 billion to build or expand supercomputers as part of the European High Performance Computing (EuroHPC) program. Virkkunen said the EU would like Canada to be the first offshore country to join the partnership.

In Canada, the federal government has committed $705 million for a new supercomputing system, and has put nearly $342 million more into the Digital Research Alliance of Canada to expand processing power for researchers. Ottawa has also awarded Cohere $240 million in financing to help pay for $725 million in planned spending for a new Canadian data centre. And later this week, Canada is expected to announce a compute infrastructure agreement with the U.K., which is already a member of the EuroHPC program.

Those sums pale, though, in comparison to U.S. compute spending. The U.S. Department of Energy alone is sponsoring two new supercomputers worth a combined US$1 billion. OpenAI, Meta and other Silicon Valley firms are commissioning hundreds of billions worth of new AI infrastructure between them. 

Bednar said that, unlike the EU, Canada has been shy to take on the tech giants and their dominance of areas like AI for fear of U.S. retaliation, or damaging trade negotiations. “A coalition of the willing is great,” Bednar said. “But what else is Canada going to do?”

Solomon has said Ottawa needs to avoid “over-indexing on warnings and regulation,” claiming “Canada can’t regulate alone” when the U.S. and China are rejecting new rules in order to win the AI race.

Clarification: This story has been updated to clarify the nature of federal funding awarded to Cohere for a new Canadian data centre.