Ottawa plans up to $1.6 billion equity stake in Cohere

Prime Minister Mark Carney announced that the federal government will invest up to $1.6 billion in equity in Cohere, a company founded in Toronto that builds secure AI systems for businesses and governments. The question is what Ottawa gets in return.

BetaKit reported that the stake is part of Cohere’s planned Series E, a funding round in which investors buy shares. Cohere is seeking up to $7 billion, which would be the largest round in Canadian startup history. Germany’s Schwarz Group, owner of the Lidl and Kaufland retail chains, is leading the round, Ontario Construction News reported.

In return, Cohere must keep its Canadian incorporation and headquarters, create at least 1,000 new technical jobs in Canada by 2030, and commit at least $1.7 billion to more computing infrastructure in Canada by 2030. The money will be paid in stages, with regular public reporting on jobs and investment in Canada. Minister Evan Solomon said jobs and revenue targets are key to the staged investment, but he declined to share the commercial terms.

Ottawa has backed Cohere before: in 2024 it awarded the company up to $240 million for an AI data centre. The new commitment of up to $1.6 billion is more than six times that. Mr Carney said Cohere has grown from a Toronto startup into a global company in seven years.

For context, Toronto’s professional, scientific and technical jobs rose from 249,000 in 2006 to 532,000 in 2024, according to Statistics Canada.

Sources: Government of Canada, Prime Minister’s Office · BetaKit · Ontario Construction News · Statistics Canada · Cohere