TORONTO — The Liberal government is in discussions with the United Arab Emirates and Saudi Arabia on AI as it courts global capital for Canadian data centres and companies, AI Minister Evan Solomon told The Logic. 

“The mission here is to create sovereign AI,” Solomon said. To achieve this, he said, Canada needs “partnerships that lead to growth” and “build an industrial base.”

Prime Minister Mark Carney has cited data centres as the kind of large-scale project that his new Liberal government wants to encourage, as Canada looks to reduce its dependence on trade with the U.S. The government has already committed $2 billion to grow Canada’s AI compute capacity, and previously proposed $15 billion to get pension funds to take stakes in and make loans to data centre operators.

Amazon, Google and Microsoft have all announced plans to build out computing infrastructure in Canada as they capitalize on AI demand. The U.S. cloud giants are important, but Canada needs alternatives, according to Solomon, and building new facilities is enormously expensive; OpenAI has estimated that a one-gigawatt data centre could cost US$20 billion. 

Canada needs to look for “pockets of capital” around the world, Solomon said, citing a “constructive engagement process” with the UAE and Saudi Arabia. 

Both governments are spending heavily on AI. State-linked Emirati firm G42 is building a multi-billion-dollar, five-gigawatt campus in Abu Dhabi and has developed U.S. compute clusters with chips from portfolio firm Cerebras. Mubadala-backed MGX has also invested in U.S. data centres.

The UAE is “a very sophisticated player along the entire value chain,” said Solomon, who met with Emirati Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan last week. Canada is “absolutely going to engage with that kind of partnership, as everyone is, to broaden our base,” Solomon said, citing longstanding ties between the UAE and countries like the U.S. and France. 

Saudi Arabia, meanwhile, has reportedly committed up to US$100 billion to grow its AI sector. Last month, the kingdom’s Public Investment Fund launched a new AI company called Humain, which will build data centres and develop AI models and tools. 

Discussions with both countries are still in early stages, Solomon said.

Canada’s relationship with the UAE and Saudi Arabia has been strained over commercial and human rights issues, respectively. Solomon said the Liberal government is engaging on AI with both countries with its “eyes wide open.” He also cited opportunities to work with other countries, including France, Germany, the United Kingdom and India, that are attempting to diversify their economic relationships. “The appetite to partner and invest in Canada has never been higher,” he claimed.

While Canada is trying to secure ownership and control of AI within its borders, it still needs hardware and capital from other countries, Solomon acknowledged. “Sovereignty is not solitude.”

Some Canadian hardware firms have expressed concern that the benefits of Ottawa’s compute strategy will mostly flow to U.S. chipmakers. The program’s first major award was $240 million for Toronto-based Cohere, which will use the federal financing to buy capacity at a new Canadian data centre that New Jersey-based CoreWeave is building with Nvidia chips. Homegrown cloud firms have criticized the choice. Telus is also using Nvidia hardware in its new data centre strategy, while Bell has leased the first new facility in its own AI compute push to Groq, a San Francisco-based chipmaker.

“We can’t pretend that we can wall off Canada and just say, ‘Let’s build a sovereign AI with all Canadian products,’” Solomon told The Logic, so companies and governments here must be free to work with foreign firms.

While Cohere may be using American-made chips, its headquarters and intellectual property are in Canada, as are many of its workers and investors, Solomon said. “We want them to stay,” he said, rather than being bought up and hollowed out by a foreign firm.

The federal government also plans to use its own spending power to help Canadian AI companies grow, while their technology makes the public service more efficient. “Procurement is going to be an absolutely vital instrument,” Solomon said, because firms can leverage government contracts to find new customers and raise private funding. 

The Liberals are promising to move quickly to plug gaps in AI programs and policies, so that the country keeps hold of more companies and builds sovereign infrastructure. 

Solomon cautioned that the results will take time to materialize, and that Canada isn’t the only country chasing these investments and industries. “It’s massively competitive,” he said.