\u201cData is not gold in Fort Knox, where you lock it up. But Canadians need to know the most important definition is that sensitive data is subject to Canadian law.\u201d<\/p>\n
Evan Solomon<\/p><\/blockquote>\n
Minister Evan Solomon has previously said the country is in a \u201ccrisis moment\u201d<\/a> requiring increased support of the tech sector to grow the economy and retain Canadian talent. With the relationship between Canada and the United States (US) fundamentally changed<\/a>, the federal government is also looking to exert more control over its digital infrastructure, which experts warn is dominated by American tech giants.\u00a0<\/p>\n Prime Minister Mark Carney announced this month that he plans to build a sovereign cloud<\/a> through the Major Projects Office. The announcement comes amid larger governmental efforts to fund \u201csovereign AI\u201d where Canadian companies run data-hosting services rather than rely on US players.<\/p>\n With the government\u2019s announced priorities, tech firms, telecommunications giants, and even US companies are now jumping at the chance to provide \u201csovereign\u201d services in Canada. But with the entrenchment of American cloud providers and US-owned infrastructure, experts say determining what is \u201csovereign\u201d is more complex than simply storing data within the country.\u00a0<\/p>\n Dependence on US providers<\/p>\n The cloud is an online digital infrastructure for applications and data. It powers computations, including AI training and reasoning processes, through servers housed in data centres throughout the world.\u00a0<\/p>\n US hyperscalers\u2014including Amazon Web Services (AWS), Microsoft Azure, and Google Cloud\u2014provide the majority of the world\u2019s cloud services, including in Canada. They sell cloud services to both the public and private sectors. At the federal level, the shortlist of companies approved to sell cloud services to the government includes seven American companies and just one Canadian company, ThinkOn. On the infrastructure side, American firms own nearly a third of Canada\u2019s 283 data centres<\/a>.\u00a0<\/p>\n \u201cIt could put you at a meaningful risk if all of your tech and data needs are depending on another country or market.\u201d<\/p>\n Michael Pelosi As part of their offerings for non-US markets, Google, Microsoft, and AWS offer \u201csovereign\u201d capabilities<\/a> that promise security and data residency. For example, Google Cloud offers a \u201cdata boundary\u201d tailored for Canada that keeps information within the country. It also offers air-gapped solutions for intelligence and defence, keeping data off the internet. Through its accelerator programs, Google offers incentives for up to $350,000 worth of cloud credits for AI-first Canadian startups<\/a>, as well as support in migrating data over to its cloud.\u00a0\u00a0<\/p>\n However, storing data in Canadian data centres doesn\u2019t guarantee data sovereignty, according to experts<\/a>. Under the US CLOUD Act<\/a> and the Foreign Intelligence Surveillance Act (FISA), there are circumstances where data hosted on servers owned by US companies could be turned over to US law enforcement by request. The Canadian government called FISA a \u201cprimary risk to data sovereignty\u201d in a 2020 white paper<\/a>.<\/p>\n \u201cMicrosoft does not provide any government with direct, unfettered access to customer data,\u201d a Microsoft spokesperson said in a statement to BetaKit. Requests for data are subject to \u201crigorous review\u201d to ensure they are legally valid and \u201climited to specific account identifiers.\u201d\u00a0<\/p>\n A Google Cloud spokesperson told BetaKit in a statement that the company offers \u201ctools and policies that let customers hold their own encryption keys, giving them control over who accesses their data.\u201d<\/p>\n RELATED: <\/strong>Carney says new Major Projects Office will help build a \u201cCanadian sovereign cloud\u201d<\/strong><\/a><\/p>\n Google and Microsoft both say they maintain strict data privacy protections and would fight for customer privacy in the event of a request from law enforcement. However, Microsoft admitted in a French court<\/a> this year that it could not guarantee that French citizens\u2019 data would be safe from US agencies without explicit authorization from the French government.\u00a0<\/p>\n Canadians have raised concerns about data security in the wake of the US administration\u2019s often unpredictable trade policy decisions.<\/p>\n Vass Bednar, managing director of the policy think tank Canadian SHIELD Institute, said the ongoing trade war presents a security gap when foreign companies have control over Canadian cloud services.\u00a0\u00a0<\/p>\n \u201cA US big tech firm could be bullied to temporarily turn off cloud for businesses and public services,\u201d Bednar told BetaKit. \u201cIt would be like the Rogers outage<\/a>, but way worse.\u201d<\/p>\n Cohere\u2019s country manager for Canada, Michael Pelosi, said at Forum Fintech in Montr\u00e9al that data location is one of the bigger risks for enterprises deploying AI.<\/p>\n \u201cAlthough we\u2019re big fans of all the tech players, we do think that with the geopolitical climate, or if there\u2019s any additional instability, it could put you at a meaningful risk if all of your tech and data needs are depending on another country or market,\u201d Pelosi said.\u00a0<\/p>\n Francois Chadwick, Cohere\u2019s chief financial officer, told BetaKit that data sovereignty is \u201cbuilt into\u201d the company\u2019s product, as it allows clients the flexibility to run the application on their premises and retain cloud services they were already using.<\/p>\n \u201cAs companies look forward in using AI, this is just going to become more and more of an issue,\u201d Chadwick said. \u201cPeople are going to start to say, \u2018How good do I feel about who could access my data?\u2019\u201d\u00a0<\/p>\n \u201cSovereignty not solitude\u201d<\/p>\n At ALL IN, Solomon stressed that building more Canadian infrastructure would be key to digital sovereignty\u2014by his definition, Canadian control over data that is \u201cfree from coercion.\u201d\u00a0<\/p>\n \u201cData is not gold in Fort Knox, where you lock it up,\u201d Solomon said. \u201cBut Canadians need to know the most important definition is that sensitive data is subject to Canadian law. That\u2019s a core principle that we\u2019re rolling out.\u201d<\/p>\n In response to a question from BetaKit, Solomon said the government is working on three models of data hosting: highly secure (for government use), a publicly available model, and a hybrid model. The type of data considered \u201ckey sensitive data\u201d could include personal data about Canadians, such as health and financial information.\u00a0<\/p>\n As for concerns about privacy infringement from the US through the CLOUD Act, Solomon told reporters that the government is exploring \u201cgenuine solutions\u201d with Canadian companies and Canadian hardware.<\/p>\n Canada\u2019s sovereign cloud project<\/a> follows its Sovereign AI Compute Strategy<\/a>, a $2-billion project that aims to build domestic data centres and help Canadian companies access computing power to run AI models. At the same time, the federal government said it would forward a new \u201cBuy Canadian\u201d policy<\/a> to prioritize procurement from Canadian suppliers.\u00a0<\/p>\n Determining the sovereignty of AI infrastructure is a complex task, according to Niraj Bhargava, co-founder and CEO of Ottawa-based NuEnergy.ai<\/a>. The AI consultancy has developed a sovereignty assessment framework\u2014a set of criteria for measuring sovereignty across the tech stack and the AI life cycle (from training to running AI models).\u00a0<\/p>\n \u201cWe can\u2019t kid ourselves [that] we\u2019re suddenly going to have a Canadian stack.\u201d\u00a0<\/p>\n Niraj Bhargava The assessment framework also looks to measure the percentage of Canadian ownership of a stack, which might have a different level of importance, depending on the data.\u00a0<\/p>\n \u201cIf we wanted to have a purely sovereign stack, that\u2019s a huge investment,\u201d Bhargava said. \u201cWe can\u2019t kid ourselves [that] we\u2019re suddenly going to have a Canadian stack. So how do we make sure we\u2019re intelligent about any dependencies and mitigate any risks?\u201d<\/p>\n The federal government has not yet indicated what a Canadian sovereign cloud initiative might cost, with Bednar noting \u201cthe math is complex.\u201d The EuroStack Initiative<\/a>, run by a group of European tech companies, hopes to deploy a fully capable continental tech stack for \u20ac300 billion over the next 10 years. US trade groups have put the cost closer to \u20ac5 trillion<\/a>, larger than the GDP of Europe\u2019s largest economy, Germany.<\/p>\n Through the compute strategy, the federal government has already pledged $240 million<\/a> to Cohere for compute. The company will be one of the tenants in a Cambridge, Ont. data centre called Ascent TOR1, a former BlackBerry building, according to the Waterloo Region Record<\/a>. However, there is US involvement in the project. The three American owners\u2014Ascent, Related Digital, and TowerBrook Capital Partners\u2014received a $450-million loan from the Canadian Pension Plan Investment Board, while US-based CoreWeave was tapped to run the facility<\/a>.\u00a0<\/p>\n Meanwhile, two of the nation\u2019s largest telecoms have joined forces with tech companies to build networks of \u201csovereign AI\u201d data centres. Telus teamed up<\/a> with software firm OpenText, while Bell and Cohere<\/a> struck their own deal. These partnerships allow telecom companies to rent out space in their data centres to tech companies, who can use them to run AI models.\u00a0<\/p>\n RELATED: Telus opens inaugural Sovereign AI Factory in Rimouski<\/a><\/strong><\/p>\n According to a Bell AI Fabric spokesperson, this project ensures that \u201cboth the infrastructure and data remain under Canadian jurisdiction, free from foreign government oversight.\u201d\u00a0<\/p>\n Telus also just opened Canada\u2019s \u201cfirst sovereign AI factory\u201d in Rimouski, Que.<\/a>, which the company claims provides fully Canadian compute and cloud services. Hesham Fahmy, chief information officer at Telus, told BetaKit that its ownership of all parts of the \u201cAI factory,\u201d including fibre connectivity, ensures that the data it hosts is secure from US encroachment.\u00a0<\/p>\n However, both of the sovereign AI networks are buying hardware from American firms. Telus has partnered with Nvidia to use its AI-friendly processing power, and Bell has partnered with US firm Groq for the hardware in its new data centres<\/a> in BC.\u00a0<\/p>\n\n
Cohere<\/p><\/blockquote>\n![\"\"](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2025\/09\/24-sept_AM-574111-1024x683.jpg\" "\\"Michael")
<\/a>Cohere country manager for Canada, Michael Pelosi, speaks at ALL IN in Montr\u00e9al. Image courtesy ALL IN.<\/p>\n![\"\"](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2025\/09\/24-sept_AM-176-1024x682.jpg\" "\\"ALL")
<\/a>Evan Solomon (right), Aidan Gomez (centre), and others on stage at ALL IN 2025.<\/p>\n\n
NuEnergy.ai<\/p><\/blockquote>\n