Canadian AI company turns away from U.S. government work amid trade tensions

An Ottawa-based artificial intelligence (AI) company, Caseway, has decided to distance itself from potential opportunities with the U.S. government due to growing trade tensions and concerns about reliance on the United States. CEO Al Vigier explained that he is uncomfortable collaborating with the U.S. while they simultaneously threaten Canada, particularly in light of President Donald Trump's claim that Canada should become the "51st state."

The decision resulted in a significant missed opportunity, as Caseway secured one of only eight presentation spots at a major industry conference, which would have led to potential funding rounds of $50 million to $100 million.

The move highlights a broader issue for Canada's AI industry, which remains heavily dependent on infrastructure in the United States. Sean Mullin, a University of Toronto expert on innovation and technology policy, noted that Canada's reliance on the U.S. is especially concerning when it comes to sensitive government and defense information. He questioned whether such data should be processed through AI models beyond Canada's control.

The federal government has pledged investment in quantum computing, data centers, and improvements to Canada's electricity grid, but these initiatives could take years and require substantial funding. Mullin believes Canada should instead focus on areas within the AI industry that align with its strengths and work as partners rather than attempting to build every component of the ecosystem independently.

Caseway's strategy is to concentrate on Canadian defense markets while exploring opportunities abroad in Europe and Taiwan. The company is grappling with the challenge of finding sufficient capital to fuel growth. "On the investment side, it's really bad. It's hard to raise capital in Canada," Vigier commented. The federal government has not dismissed the opportunity for domestic AI companies, with the AI minister's office highlighting funding commitments and plans to serve as an anchor customer for Canadian AI companies.

Vigier expressed optimism that increased federal attention to defense will provide a potential boost, given the significant investments being made in the sector.