Ottawa is buying into Cohere — up to $1.6 billion for a stake in Canada's AI champion

The deal

The Government of Canada will take an equity stake in Cohere, the Toronto-based builder of enterprise artificial intelligence systems, as part of the company's Series E funding round, Cohere announced Thursday, Oct. 29. The round targets up to $7 billion Canadian — about US$5 billion — which would value the company at $35.7 billion. Cohere said it is the largest private financing ever undertaken by a Canadian technology company.

Canada's commitment is up to $1.6 billion, nearly a quarter of the round's target, according to Dow Jones Newswires, which first reported the government's participation. The funding will flow in stages and carries conditions: Cohere must create at least 1,000 new high-paying jobs in Canada, keep its headquarters in the country, and deploy nearly $2 billion in additional domestic computing infrastructure, according to the government's statement. Cohere separately said it plans to spend about $1.2 billion on domestic computing capacity by 2030, Bloomberg reported.

Who else is in

Germany's Schwarz Group — owner of the Lidl and Kaufland retail chains — is the round's lead investor, with a commitment of about $600 million, according to Bloomberg. New investors also include Bell Ventures and Bullhound Capital alongside the Government of Canada, while Nvidia, Inovia Capital and Prosperity7 Ventures are returning investors, Cohere said. BCE, the parent of Bell, was also named among the participants in the Dow Jones report.

The round follows an August 2025 memorandum of understanding between Cohere and the federal government to apply the company's sovereign AI technology across the public sector.

Why Ottawa is doing this

Prime Minister Mark Carney announced the stake in Montréal, framing it as a sovereignty play. "Canada's investment in Cohere is an investment in choice, in security, and in our ability to live our lives as we choose," Carney said in a statement included in Cohere's announcement, adding that sovereignty depends on the ability to build, adopt and govern AI on Canada's own terms.

AI Minister Evan Solomon said this will not be the last time Ottawa takes an equity position in a homegrown tech company, according to reports of his remarks. Cohere, led by chief executive Aidan Gomez, sells AI systems for regulated industries and governments — the "sovereign AI" market that McKinsey projects will reach $600 billion, according to Cohere's announcement.

What we don't know yet

The announcement does not disclose how much of Cohere the government will own, what share class or price it receives, or how much money changed hands at the initial close versus the full $7-billion target. Readers should not assume the full $1.6 billion lands at once: the money is staged, with regular reporting on whether Cohere meets its jobs and investment commitments. The announcement also does not say when the full round will finish.

For Canadians, the practical stakes are jobs and infrastructure at home — and whether a government shareholder changes how a company built on selling to governments, including Ottawa itself, is governed. Those questions will be answered in the terms Ottawa has not yet published, and in the follow-up reporting the staged structure invites.