Ottawa to take equity stake of up to C$1.6 billion in Cohere, with jobs and headquarters conditions

Canada's federal government will take an equity stake of up to C$1.6 billion in Cohere, the Toronto-based AI company. Prime Minister Mark Carney announced it Thursday, Oct. 29, in Montreal, where he was hosting European Union leaders for a Canada-EU summit.

The C$1.6 billion is a ceiling, not a cheque. The government's press release said the money will arrive in stages, with regular reporting on the commitments Cohere has made.

What Cohere has to deliver

The government listed the conditions:

• Create at least 1,000 new high-paying Canadian technical jobs by 2030.
• Commit at least C$1.7 billion to new computing infrastructure in Canada by 2030.
• Keep its Canadian incorporation and headquarters.
• Invest in research partnerships and create opportunities for Canadian students and graduates.
• Keep working with the Canadian AI Safety Institute.

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

He framed the deal as a sovereignty play. "The most powerful AI systems are concentrated in a very small number of companies, in a very small number of countries," Carney said. "That concentration carries risks: to cost, to resilience and to sovereignty."

The round around it

Ottawa is joining a Series E in which Cohere is seeking up to C$7 billion. Cohere announced an initial close the same day. The company has not said how much of the C$7 billion investors have committed so far.

Germany's Schwarz Group, owner of the Lidl and Kaufland retail chains, is leading the round. It pledged $780 million in April as part of Cohere's merger with German AI developer Aleph Alpha. Bell Ventures, Bullhound Capital and the federal government are new investors. Inovia Capital, Nvidia and Prosperity7 Ventures are returning.

Reported valuation is about C$35.7 billion, or roughly US$25.4 billion at the Bank of Canada's Oct. 28 exchange rate. The federal announcement itself gave no valuation, and some outlets round it to C$36 billion. Treat the figure as unconfirmed until Cohere or Ottawa publishes terms.

For scale, Cohere's previous round raised US$600 million across two closings in 2025 at a US$7 billion valuation. Cohere says the new round is the largest private financing ever by a Canadian tech company. The previous records were Clio's C$1.24 billion in 2024 and Waabi's US$1 billion in January, according to The Logic.

CEO Aidan Gomez called the government's stake "a huge honour, not only for Cohere but for the country." He said Cohere is the largest AI company outside the U.S. and China. That is his claim, not an independent ranking.

Not a first dollar from Ottawa

The money builds on earlier public support. In 2024 the government committed up to $240 million to boost Cohere's computing capacity. In 2025 Ottawa signed an agreement with the company to identify where AI can improve public service operations.

Carney said the government is investing "on a commercial basis," alongside private investors including Nvidia, Bell and Schwarz. The government's release said an equity stake lets taxpayers share in the company's success and gives Ottawa a way to track performance against its commitments.

Artificial Intelligence Minister Evan Solomon has repeatedly pointed to Cohere as proof that Canada is one of a few countries with its own large language model.

Open questions

The government has not said what percentage of Cohere it will own, what share class it is buying or what price it is paying. It has not said how the tranches map to specific milestones, or what happens if Cohere misses the 2030 targets.

Those terms decide whether this is a disciplined commercial bet or an open-ended taxpayer exposure to one company in the most capital-hungry industry on earth. The AI race is already dominated by far bigger players. The Logic reported that OpenAI raised US$122 billion in March at a US$852 billion valuation, and Anthropic raised US$65 billion in May at US$965 billion.

Cohere's founders argue it needs less capital than those labs because business customers often pay for their own computing. The company sells models to governments and regulated industries, which can run them in a private cloud, on their own servers or in air-gapped environments.

The foreign-customer question

One analyst note, from SignalVest Research, argues the sovereignty framing cuts both ways. Its authors say a vendor with a foreign government as an equity holder changes the counterparty-risk picture for institutional investors, procurement officers and contractors already running Cohere in production. They compare it to U.S. concerns about Chinese-made connected vehicles.

That is one firm's argument, and neither Cohere nor the Canadian government has addressed it. No U.S. agency or customer has been reported objecting to the deal.

The Schwarz tie-up is already shaping where the technology runs. 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.

The next test is disclosure. Ottawa has said it will report on Cohere's commitments, but it has not said when it will publish the price and ownership stake behind the C$1.6 billion.