TORONTO — The federal government is spending $42.5 million to expand artificial intelligence infrastructure at the University of Toronto, in an attempt to make Canada’s research more competitive.

The money will bolster the computing capacity researchers use to power their AI-driven work with new infrastructure that’s not currently available in Canada. It will help more than double the number of chips it uses to train and run AI models, and pay for newer, more powerful chips for the university’s supercomputer system.

The investment is designed to address concern among academics and AI startups that Canada doesn’t have enough domestic compute power to meet the growing demand. Researchers have said the shortage limits the scale and speed of their work.

“I’ve been meeting with stakeholders across the country and we just hear the same message: We need compute. We need it to be Canadian,” AI and Digital Innovation Minister Evan Solomon said at the funding announcement in Toronto Friday morning. He added that while the infrastructure is located in Toronto, it will serve researchers and industry players across the country. 

The funding comes through Ottawa’s Sovereign AI Compute Strategy, a $2-billion pool of money announced in the 2024 budget. The strategy aims to build more AI compute in Canada instead of relying entirely on foreign providers such as Nvidia, Amazon and Microsoft. In March, the government pledged up to $240 million through the plan to help Toronto-based Cohere buy AI compute at a new data centre that New Jersey-based cloud computing firm CoreWeave is building in Cambridge, Ont. The University of Toronto funding is the second commitment the government has announced through the strategy. 

The Digital Research Alliance of Canada, an Ottawa-funded non-profit, will administer the funding and deliver the program.The government’s contribution includes $40 million for equipment in the 2025–26 fiscal year and $2.5 million over the following two years to support staffing and operations. The University of Toronto is putting $100,000 toward the initiative. 

AI firms have urged Ottawa to roll out the Sovereign AI Compute Strategy faster, warning delays could make it harder for Canada to keep pace with other countries that are investing heavily in AI infrastructure.

University of Toronto president Melanie Woodin said the funding will strengthen the university’s position as a global AI leader and improve Canada’s ability to develop “cutting-edge” research and innovation.