TORONTO — Telus will try to capitalize on surging demand for AI processing power by adding Nvidia chips to its data centres, starting with a small deployment this summer.  

On Tuesday the telecommunications giant announced plans to launch a service it calls Sovereign AI Factory from a data centre in Rimouski, Que. Telus will sell the new compute capacity to Canadian businesses and researchers developing AI models and products. 

“There’s definitely a need for it in the market, and there’s scarcity of supply,” said CIO Hesham Fahmy, in an interview from Nvidia’s GTC conference in San Jose, Calif.

Telus will initially install a 500-chip cluster of Nvidia’s popular Hopper graphics processing units (GPUs), with space for up to six more bundles, said spokesperson Athyu Eleti. The firm plans to add AI chips to a second data centre in Kamloops, B.C., although Eleti said that expansion will depend on the success of the one in Quebec.

Demand for AI infrastructure has boomed as software developers build new models and applications and businesses adopt them. Most still buy their processing power from the cloud arms of technology giants Amazon, Google and Microsoft, but the growing market has also attracted new compute players offering hardware specialized to train and run AI systems. All use Nvidia’s GPUs, including the ubiquitous Hopper, first announced in March 2022.

Telus says it will be one of the first to offer the hardware in Canada. But the Rimouski cluster is relatively small. Denvr Dataworks, a Calgary-based AI services firm, operates about 4,000 GPUs across its four North American facilities, including one in Canada. 

Toronto’s Cohere used 2,000 GPUs to train its new Command A model, which can run on just two of the chips. The generative AI firm is the anchor tenant of a new Canadian data centre filled with Nvidia GPUs that will be built by CoreWeave, a New Jersey-based cloud upstart. 

Fahmy said Telus welcomes competition. “The key is going to be who gets to market,” he predicted. While the company is starting with 500 GPUs so it can launch quickly, it aims to scale to tens of thousands of chips “over the next couple of years” if there’s enough demand, he said.

The firm also didn’t want to lock itself into old hardware. Nvidia has already started rolling out its next-generation Blackwell GPUs, which Telus will also be able to buy under its deal with the chipmaker.

Telus is the first of Canada’s major telecom firms to enter the AI compute market. Rogers, by contrast, put most of its data centres up for sale last March. 

Eleti declined to disclose how much Telus is spending on the Nvidia chips. Hoppers cost about US$25,000 apiece, according to GPU rental service Jarvislabs. Telus is in early discussions with the federal government for financing via Ottawa’s $2 billion sovereign compute strategy, but will add new AI capacity whether or not it gets public funding, Eleti said. 

Telus already sells cloud services to some of its customers. In AI, it sees a big opportunity in businesses and government departments that need to ensure data and tools stay on Canadian soil for security or regulatory reasons. Fahmy said he also expects to sell compute to researchers at academic labs, who could use it to develop new technology.