Wwith more than 400 employees Cohere, valued at $6.8 billion, is one of Canada's leading artificial intelligence companies. On the surface, it appears ideally suited to achieve the federal government's goals of keeping pace with the global AI race and achieving technological sovereignty on the part of the United States.
Unlike its competitors OpenAI, Microsoft and Anthropic, Cohere does not offer a flagship consumer chatbot like ChatGPT; instead, it creates large language models and artificial intelligence programs for businesses and governments. Over the summer, Cohere signed agreements with the governments of Canada and the UK to bring AI into the public sector. The company also announced a partnership with Bell Canada that will make Cohere's AI infrastructure available to Bell customers and Bell will become Cohere's “preferred Canadian AI infrastructure provider.”
Founded in 2019, the company was created by homegrown talent: co-founder and CEO Aiden Gomez, who completed his undergraduate studies at the University of Toronto, previously interned with artificial intelligence pioneer Geoffrey Hinton and Lukasz Kaiser at Google Brain, and co-authored an influential paper in 2017 that helped pave the way for LLM programs. And for now, the company seems intent on remaining Canadian. At a conference in June, Gomez, along with leaders from Wealthsimple and Shopify, insisted that for the country's tech sector to grow, its entrepreneurs must resist the lure of US takeovers.
But go beyond these requirements and Cohere begins to lose its luster. First, the company relies heavily on American technology. In 2024, Cohere received $240 million in federal funding to support construction of a $725 million data center in Cambridge, Ontario. The funding is part of Canada's $2 billion Sovereign AI Computing Strategy, which aims to improve the country's national capacity to develop AI products and support AI infrastructure. Cohere will reportedly use the funding to partner with CoreWeave, a US-based artificial intelligence infrastructure company, to build a data center. CoreWeave is a popular choice for US companies, including OpenAI and Microsoft, as it provides much-needed data processing for AI work. Jeff Gordon, CEO of Denvr Dataworks, a cloud-based artificial intelligence platform based in Calgary, said Logics earlier this year he was deeply disappointed that federal funding would “flow to an American company, which is just ridiculous.” Cohere co-founder Nick Frost told the publication that he hopes to one day see Canadian companies offering the same type of infrastructure.
The government contract did not require Cohere to select a Canadian supplier, although there are options. ThinkOn, an artificial intelligence company that stores Canadian federal data, operates eleven data centers in the country and eighteen others in the US, UK and Australia. Another alternative, Cerio, works with companies to build energy-efficient data centers. However, neither of these companies uses the same technology as CoreWeave, which has access to popular GPUs used in artificial intelligence data centers through a partnership with US chipmaker Nvidia. CoreWeave infrastructure underpins some of the world's largest AI operations, including OpenAI, Microsoft and Meta operations supported by multibillion-dollar agreements. Perhaps faced with a choice between investing in Canadian companies in hopes of long-term returns or using American technology for quick results, Cohere appears to be betting on the latter.
Some of Koger's other associations cannot be explained as easily. Cohere has a relationship with Palantir, a multi-billion dollar US data analytics company with a history of partnering with US military and intelligence agencies. The collaboration with Palantir will give Cohere access to cutting-edge artificial intelligence software and U.S. government clients. At the 2024 DevCon1 conference, a Cohere representative explained how the company serves Palantir clients by building custom AI models for them. He did not specify who the clients are.
This worries critics, given Palantir's disgraceful reputation. It was founded by Peter Thiel, an ardent supporter of US President Donald Trump and a former mentor to Vice President J.D. Vance. The company has been criticized for, among other things, creating a program to help U.S. Immigration and Customs Enforcement identify personal information to target immigrants for deportation. In 2018, more than 200 Palantir employees signed a petition to halt the ICE program, but were unsuccessful. This year, Palantir signed another $30 million contract to track people who overstayed their visas or left voluntarily.
These activities are not directly related to Cohere. But neither Palantir's origins nor its current operations seem to concern Cohere's management. Frost commented on the relationship in Logicsnoting that he is not familiar with Palantir's work, but is comfortable with any company using Cohere's technology as long as it follows its terms of use. The terms include a ban on using technology to store or distribute harmful materials or to create weapons.
Yet these terms of use mean little, given that Cohere's technology itself may have been created using questionable methods. This year's group of fourteen publishers, which includes Toronto Star and American publishers Condé Nast and Forbessued Cohere for using their articles without permission to train artificial intelligence systems. (Microsoft and OpenAI face similar copyright infringement lawsuits.) Media companies claim Cohere's systems created hallucinations: fake articles attributed to publishers. In a statement in TechCrunchCohere communications director Josh Gartner called the lawsuit “misguided and frivolous,” and Cohere filed to dismiss the case in May. The US court rejected the request in a ruling last Thursday.
Any result would be alarming. If the case proceeds, it could call into question the integrity of the federal government's chosen AI vendor. If this doesn't happen, it will raise questions about how AI darlings like Cohere can be held accountable in the future. Because as of this writing, the government has not yet adopted national AI rules that would partially protect Canadians' data.
To avoid potentially problematic linking, the federal government could take advantage of the European Union's Artificial Intelligence Act, which provides copyright and privacy protections for user data. Otherwise, by pushing the Cohere partnership to prioritize AI adoption, the government could jeopardize the very data sovereignty it is trying to protect.
