OTTAWA — Canadian cloud firm Denvr is recruiting homegrown defence tech firms to use its digital infrastructure for new AI tools and autonomous equipment. So far, the coalition has landed two Ottawa-based startups, Dominion Dynamics and Sapper Labs. 

The federal government has promised to secure Canada’s digital sovereignty, including by increasing compute capacity, and to help foster a domestic defence industry, in part by buying AI, quantum and other new technologies for the Canadian Armed Forces. 

Denvr is spearheading a domestically-focused technology setup called the Canada AI Platform (CAIP), and the new security-focused consortium that will help develop it is the CAIP Defence Coalition. 

Headquartered in Calgary, Denvr builds its own data centres filled with advanced chips, then adds cloud services and AI models on top. Clients can buy access to the raw processing power, or plug in their data and technology to develop and run AI agents and other tools. The firm is positioning itself as a Canadian and more co-operative alternative to the so-called hyperscalers—the cloud arms of U.S. tech giants Amazon, Google and Microsoft.

Denvr is homegrown, manufactures and builds domestically, and runs its AI services over national networks and public and private cloud systems, said Marc Kronewitt, the firm’s executive officer for business development. “If you are a native AI company in Canada, you don’t actually have to cross the border—your data stays here.” 

Dominion will use the CAIP to create a “synthetic environment” to test ideas for next-generation military aircraft, its CEO, Eliot Pence, told The Logic.

Drones are widely expected to play a major role in future defence aviation, but it’s not yet clear exactly how they’ll work with, or perhaps take over from, crewed jets. Canada’s needs are unusual—surveilling an “insanely vast land mass” and being ready to defend against attacks from far away or launched from submarines under Arctic ice, Pence said.

Dominion intends to build a system for the Royal Canadian Air Force (RCAF) to test different ways of responding to different threats, using machine learning to refine the options ever more precisely, he said.

“It could be a single drone, it could be multiple drones. It could be drones operating at a high altitude, it could be drones operating at a low altitude. It could be drones forward-located—deployed in the Arctic—it could be drones from Ottawa. It could be collaborative teaming of multiple different types of assets,” he said. “What we’re building is essentially a decision engine for the RCAF to downselect what kinds of platforms make the most sense given their operational context.”

Pence’s intent is that Dominion will go on to build drones that suit the air force’s needs and to sell the simulation system to other militaries.

The company is also working on sensor systems and tools for gathering and collating intelligence from the Arctic, relying on cloud computing to make sense of it all. Aside from the sovereignty questions around their services, giant U.S. providers are not very keen on meeting Dominion’s needs.

“Sometimes we’re cloud-connected but the vast majority of the time we’re not, and having a conversation with a hyperscaler to say, ‘Look, this is our operational context. Can you work with us?’ is just kind of a non-starter,” Pence said. Denvr is a better partner, he said.

For now, the relationship between Dominion and Denvr is simple: Dominion buys Denvr’s computing capacity. The more operations Denvr can support and the wider the variety of its customers, the greater the potential synergies, Pence said.

The other early partner, Sapper, will also run its technology on Denvr’s CAIP, which is designed to meet the federal requirements for classified data. The two firms will also develop some technology together. Sapper sells security and information services to government departments and businesses, including supply chain monitoring, cybersecurity testing and forensic analysis, and “red-teaming” systems to find weaknesses.

The firm’s work with Denvr will help Canada “modernize its intelligence and information domain with AI that reflects Canadian values and sovereignty,” Sapper CEO Allen Dillon said.

The defence coalition is also a model for how Denvr plans to grow its own business. While some data centre developers are trying to land Silicon Valley giants or major AI labs as anchor tenants, Denvr CEO Geoff Gordon said the firm aims to work with Canadian researchers and startups as they’re developing their technology. It can then expand its infrastructure to meet the growing needs of clients if they take off, he said. “We’re confident we can scale.”

Update: This story has been updated to clarify how the Canada AI Platform works and the role of some participants.