Canada takes $1.1 billion equity stake in Toronto AI startup

Canada's equity stake in a Toronto-based AI startup marks a direct government bet on a domestic company, rather than indirect support through grants or tax incentives. The move comes as Washington's allies look for ways to reduce their technological reliance on the US, and it echoes efforts in the UK, where the finance minister this week pledged $80 billion for a sovereign AI fund aimed at boosting domestic firms. Downing Street is also planning to inject another $160 million into a government lab testing the world's frontier AI models, which would be roughly 10 times the annual budget of its US counterpart. Together, these moves suggest that some US allies are prepared to put significant public money behind building or sustaining homegrown AI capabilities, even as American voters polled in swing states express strong support for government safety testing.