Canada’s AI Leader Cohere: An American Influence Emerge

Cohere is quickly establishing itself as one of Canada’s leading artificial intelligence companies, boasting over 400 employees and a valuation of approximately $6.8 billion. Launched in 2019, the company aims to support Canada’s ambitions for technological sovereignty and compete in the global AI landscape. Unlike other prominent players such as OpenAI and Microsoft, Cohere does not offer a consumer chatbot like ChatGPT; instead, it focuses on developing large language models and AI applications for businesses and government entities.

In a significant move over the summer, Cohere secured agreements with both the governments of Canada and the United Kingdom to integrate AI into public sector operations. Furthermore, a partnership with Bell Canada was established, allowing Bell to provide Cohere’s AI infrastructure to its customer base, positioning it as Cohere’s “preferred Canadian AI infrastructure provider.”

Despite these promising developments, questions arise regarding Cohere’s reliance on American technology. In 2024, the company received $240 million in federal funding to aid in constructing a $725 million data centre in Cambridge, Ontario. This funding is part of the broader $2 billion Canadian Sovereign AI Compute Strategy, aimed at enhancing the nation’s capacity to develop AI solutions. Notably, Cohere plans to collaborate with CoreWeave, a US-based AI infrastructure provider that supplies essential data processing capabilities to major AI firms, including its competitors.

Critics have expressed concern about this reliance on American technology. Geoff Gordon, CEO of Denvr Dataworks, voiced his disappointment that federal funding would be allocated to a US company rather than fostering local enterprises. Cohere co-founder Nick Frosst articulated a hope that Canadian firms could eventually offer similar infrastructure, but the current collaboration with CoreWeave raises eyebrows.

Cohere’s partnerships extend beyond mere infrastructure. The company maintains a relationship with Palantir, a controversial US data analytics firm known for its collaborations with military and intelligence agencies. This connection provides Cohere access to advanced AI software and potential US government clients. At the 2024 DevCon1 conference, a representative from Cohere discussed how the firm customizes AI models for Palantir’s clientele, although specifics about the clients remained undisclosed.

Palantir’s history, including its connections to figures like Peter Thiel and its controversial programs targeting immigrants, adds a layer of complexity to Cohere’s operations. While Frosst expressed a level of comfort with any company using Cohere’s technology as long as they adhere to its terms of use, the implications of working with Palantir cannot be overlooked. These terms prohibit the use of Cohere’s technology for harmful purposes, yet the effectiveness of such measures remains uncertain.

Adding to the scrutiny, Cohere has recently faced legal challenges. A coalition of fourteen publishers, including the Toronto Star and US-based companies like Condé Nast and Forbes, has filed a lawsuit against Cohere for allegedly using their articles without permission to train its AI systems. The publishers claim that this practice has resulted in the generation of misleading articles attributed to them. In response, Cohere’s director of communications, Josh Gartner, characterized the lawsuit as “misguided and frivolous,” while the company has sought to have the case dismissed. A recent ruling from a US court denied this motion, leaving the potential for further legal complications open.

The outcome of this lawsuit could have significant implications for Cohere’s standing as a trusted AI provider for the Canadian government. As of now, the government has yet to establish comprehensive national regulations regarding AI, which could safeguard Canadians’ data rights. In light of this uncertainty, some observers suggest that the government should consider frameworks like the European Union’s AI Act, which provides protections for user data and intellectual property.

Without solid regulatory measures, the government’s partnership with Cohere could inadvertently jeopardize the very data sovereignty it seeks to protect. As Canada strives to position itself as a leader in the AI sector, the balancing act between leveraging American technology and fostering local innovation remains a critical point of discussion. In this evolving landscape, the influence of American firms on Canadian companies like Cohere raises important questions about the future of AI development in the country.