Solomon: Cohere stake won’t be Ottawa’s last in tech

Ottawa’s investment in Cohere will not be the last time the federal government takes an equity stake in a Canadian technology company, AI and digital innovation minister Evan Solomon said Thursday.

Solomon told BetaKit in an interview that a forthcoming federal fund, the Canadian Tech Growth Fund, will be designed with several kinds of financing, including equity positions in small and medium-sized companies. He said the aim is to help firms grow and to draw in private capital.

“We believe Canadians have made a good, valuable investment in an important company that gives us a seat at the table to control and build this technology,” Solomon said of the Cohere deal.

Prime Minister Mark Carney announced earlier Thursday in Montreal that Ottawa will invest up to $1.6 billion in Toronto-based Cohere as part of a larger Series E round, as we reported. The government said the money will be paid in stages, with regular reporting from Cohere on jobs and investment in Canada.

According to BetaKit, the Cohere investment was negotiated through the Canada Development Investment Corporation, a Crown corporation that manages government assets. The new growth fund, which was first announced in the federal AI strategy, is separate from that deal. BetaKit described it as a $500-million fund meant to provide flexible growth capital to promising AI companies and, in some cases, take equity stakes in them.

The comments suggest Ottawa is moving from grants and tax credits toward direct ownership in domestic technology firms. Last week the government unveiled a $1.75-billion plan to boost venture capital, and Carney recently named 13 people to a new national AI council.

Solomon has also been pressed on the physical needs of the AI industry. Earlier this month he said Ottawa is not responsible for AI data centre power.

Details of the Canadian Tech Growth Fund, including which companies will be eligible and how stakes will be priced and managed, have not been released.

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