OTTAWA — The Canadian branch of audit and consulting giant Deloitte is looking to generate business by building new artificial intelligence products, and may spin out independent startups based on technology it has developed.

Deloitte Canada had 14,481 staff and made $3.97 billion in revenue in 2023. “We’re the largest of our kind,” said CEO Anthony Viel in an interview with The Logic. About half its sales typically come from “transformational work,” in which Deloitte modernizes and runs a client’s technology infrastructure.

The firm helps its customers deploy software from a host of providers. Teams of Deloitte engineers and developers stitch together disparate tech offerings and build custom solutions, which Deloitte may subsequently package into products to sell to other clients.

Over the last three years, Deloitte Canada has developed about 200 of these solutions, almost all of which employ AI, Viel said. The firm’s 600-person Omnia practice works to deploy the technology for clients. But Deloitte also has “a dedicated team that just serves us,” Viel said. The 100-plus staff in that group focus on “products and services that we are developing for today,” but also where the firm sees future potential.

For example, Deloitte Canada built a generative AI tool that customer service agents use to authenticate a customer’s identity and summarize the call. Definity Financial, a Waterloo, Ont.-headquartered insurance company, rolled the product out at the end of 2023. “We had the talent to do that, and we had a client willing to be first,” Viel said. The firm has since packaged the technology into a product that other Deloitte units have launched in other countries. 

The firm has also built a digital twin of Canada’s electricity-distribution networks. Clients can use the simulation of the grid to analyze power data, monitor infrastructure and predict the effects of regulatory changes and technology. “I think it can save the planet—I honestly do,” said Viel. “It’s going to inform Canadian organizations [and] governments on how to do energy transition more effectively.” For now, Deloitte says a utility in Atlantic Canada is using it to figure out where to make its capital investments. 

Deloitte is a network of member firms in countries around the world, meaning it doesn’t act in one top-down way. Viel said Canada’s talent pool and market size—“big enough to be relevant, but not too big to do things,” he said—make it one of the group’s main markets for building and testing AI products. Some of these products may also form the foundation for independent startups. 

In October 2020, Deloitte Canada spun out the contract-management tool it built in-house as Arteria AI. Financial services clients like Goldman Sachs and Citi now use Arteria’s technology to extract data from their documents and generate new ones. Last October, Arteria closed a US$30-million Series B round, with plans to expand its sales teams.

Arteria “was better out than in [at] Deloitte, because of the path that it was on,” Viel said. The startup’s success proves spinning out products “is a good model for us.” (Deloitte no longer holds a stake in Arteria, which Viel said frees the startup from restrictions to which Deloitte, as an audit firm, must adhere.)

Arteria CEO Shelby Austin has said spinning out the company opened up a broader market for its services than it could have accessed within Deloitte. “The best way to get scale was to enter into a startup structure where we were able to take venture-capital investment to promote growth at a rapid pace,” she told The Logic last May.

Other spinout candidates could come from Deloitte Canada’s in-house incubator, which develops products and services for the consulting firm to use, as well as ones that are “better owned by somebody else,” Viel said.

In addition to launching new startups, Deloitte Canada is investing in existing ones. In January 2022, it launched Deloitte Ventures with a $150-million fund. The venture arm has since invested directly in firms with AI-related products, like CentML and Pocket Health, and has put money into early-stage funds from Golden Ventures, Inovia Capital and others.

Viel describes the venture arm as a “sensing mechanism” that plugs Deloitte Canada into the country’s technology ecosystem and helps it identify new trends. Beyond capital, he said, the consulting firm can help its portfolio companies develop their leadership and conduct mergers and acquisitions.

Deloitte Canada can also help startups build their business by including them in its client work. “We can help you grow,” Viel said.