Canada to invest up to $1.6B in Toronto-based AI company Cohere

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Prime Minister Mark Carney announces an investment in Canadian AI company Cohere, in Montreal on Thursday. (Christinne Muschi/The Canadian Press)

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The Canadian government is taking an equity stake in Cohere, joining a funding round led by Germany's Schwarz Group targeting ‌$7 billion for the Toronto-based AI lab, Cohere said on Thursday.

The round would value Cohere at about $36 billion. Schwarz, which owns the Lidl and Kaufland retail ​chains, pledged $780 million to lead the round in ​April as part of Cohere's merger with the German AI developer Aleph Alpha.

Cohere said the money will fund ​model development, products for regulated industries and computing infrastructure.

Prime Minister Mark Carney made the announcement Thursday as he welcomed European Union leaders to Montreal for a summit aimed at forging closer ties.

He said ‌Ottawa would invest up to $1.6 billion in Cohere. Other investors included Nvidia and BCE's Bell Canada subsidiary, he said.

"Cohere will stay Canadian, creating more opportunities for our workers and businesses. ⁠Its incorporation and headquarters will remain here," he said in a speech.

Carney said Canada won't wait for the future of artificial intelligence to be decided elsewhere by those Canadians don't know or trust.

Cohere will invest at least $1.7 billion in new computing infrastructure in Canada ‌by 2030, he added.

Cohere CEO Aidan Gomez called the government's investment "a huge honour."

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Schwarz, which owned more than 20 per cent of Aleph Alpha, spent almost $25 billion on new data centres in Germany. Schwarz ​Digits CEO Christian Müller said the group plans to run Cohere's models on its STACKIT ⁠cloud, calling the investment the next step after the Aleph Alpha ⁠deal.

Cohere has completed only an initial close of the round ⁠and did ⁠not say how much ​has been committed so far or when it expects the round to ​close.

The company said ⁠annual recurring revenue grew 165 per cent year over year as of the third quarter and that its customer count has grown to 300.