Cohere: Canada’s AI Leader Faces American Connections and Challenges

Cohere, a prominent player in Canada’s artificial intelligence landscape, has attracted attention for its rapid growth and ambitious projects. With more than 400 employees and a valuation of $6.8 billion, the company appears well-positioned to help Canada achieve its technological sovereignty and compete on the global AI stage. Unlike other major firms such as OpenAI and Microsoft, Cohere specializes in developing large language models and AI solutions tailored for businesses and governments rather than consumer-facing chatbots. Recent agreements with the Canadian and UK governments to incorporate AI into public sector services underscore its potential.

In June, Cohere announced a significant partnership with Bell Canada, allowing the telecom giant to offer Cohere’s AI infrastructure to its customers. This collaboration positions Bell as Cohere’s preferred Canadian AI infrastructure provider. Despite these promising developments, scrutiny arises from Cohere’s reliance on American technology, which raises questions about its commitment to Canadian innovation.

Cohere received $240 million in federal funding in March 2024 to help finance a $725 million data center in Cambridge, Ontario. This initiative is part of the Canadian Sovereign AI Compute Strategy, which aims to bolster the nation’s capacity for AI development. Notably, Cohere plans to collaborate with CoreWeave, a US-based AI infrastructure provider renowned for servicing major American tech firms. Critics, including Geoff Gordon, CEO of Denvr Dataworks, have expressed disappointment that Canadian funding is flowing to a foreign company.

While Cohere’s leadership, including co-founder and CEO Aiden Gomez, emphasizes the importance of supporting local talent and resisting U.S. acquisition, the company’s partnerships tell a different story. Canadian alternatives for AI infrastructure are available, such as ThinkOn, which operates multiple data centers across Canada and other countries, and Cerio, known for developing energy-efficient data solutions. However, these companies do not offer the same level of technology as CoreWeave, which leverages advanced graphics processing units through its partnership with Nvidia.

Cohere’s ties to American entities extend beyond infrastructure. The company collaborates with Palantir, a controversial US data analytics firm with a history of working with military and intelligence agencies. This affiliation gives Cohere access to advanced AI software and potentially lucrative contracts with US government clients. At the 2024 DevCon1 conference, a representative from Cohere highlighted the company’s role in creating custom AI models for Palantir’s customers, although specific client identities remain undisclosed.

Concerns about Palantir’s track record complicate the narrative. Founded by Peter Thiel, a notable supporter of former US President Donald Trump, Palantir has faced criticism for its involvement in programs that assist US immigration enforcement. This association has raised alarms among critics who worry about the ethical implications of Cohere’s collaboration with such a company.

In addition to its partnerships, Cohere is currently embroiled in a legal dispute with a group of fourteen publishers, including the Toronto Star and US-based companies like Condé Nast and Forbes. These publishers allege that Cohere used their articles without permission to train its AI systems, resulting in the generation of misleading content. Cohere has described the lawsuit as “misguided and frivolous,” and has sought to have it dismissed; however, a US court recently denied this motion.

Should the case proceed, it could undermine the integrity of Cohere as a federal AI provider and highlight the need for accountability in the AI sector. The Canadian government has yet to establish comprehensive national AI regulations, which raises concerns about the protection of citizens’ data rights.

To navigate these challenges, the federal government might consider adopting frameworks similar to the European Union’s AI Act, which emphasizes copyright and privacy protections. As Canada moves forward with its partnership with Cohere, it must balance the urgency of AI adoption with the imperative of safeguarding data sovereignty.

Cohere’s journey illustrates the complexities of building a robust AI industry in Canada amidst significant American influence. As the company continues to grow, both its contributions and connections will shape the future of Canada’s technological landscape.