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The Federal Government announces $2.4 billion for AI

What is the news?

On Sunday, the Federal government announced a $2.4b AI package to ensure that Canada continues to have a world-leading AI ecosystem.

What were the details of this $2.4 billion package?

Over the next five years, the $2.4 billion breaks down as follows:

• $2b to provide access to compute power from foreign tech giants or AI researchers/institutions, start-ups, and companies. This will be done via an "AI Compute Access Fund"

• ~$400m to enable AI startups to commercialize, and boost AI adoption across the economy including in SMBs broken down as follows:

  • $200m will be distributed via Regional Development Agencies

  • $100m to the NRC's IRAP program

  • $50m to help workers who lose jobs due to AI

  • $50m for the creation of a Canadian AI Safety Institute to assess the risk of "nefarious" AI systems

• The development of an "AI Sovereign Compute Strategy" to develop Canadian AI capacity and infrastructure

Are there more details on how this will be implemented?

Consider this a teaser by the government which promises more details when they announce the Federal budget on April 16.

Who are the winners from this announcement?

Without any real details, it is hard to predict.

If this is executed, it seems likely that there will be two winners and one party who is hoping to get a boost.

The clear winners will be non-Canadian tech giants like Nvidia and Amazon, who either build the compute or provide access to compute, and the legion of consultants who will charge a fee to access the $350m via Regional Development Agencies, IRAP, or the job program. The Federal Liberal party is hoping that this will give them a boost in the polls.

Should we be skeptical?

We have seen announcements like this before and most of these programs either do not get fully executed or are designed in a way that has no real impact on the start-up ecosystem that should be leading innovation. Most programs are designed to be safe and avoid failure meaning they are slow and favor large Canadian institutions, not the startups and researchers who are driving to build the future.

Furthermore, it is unclear how a $2b commitment will help provide access to compute meaningfully. Currently, the biggest issue is a lack of supply, not the ability to pay for access to compute.

What is the takeaway for our readers?

Hopefully, when details are announced, we will be pleasantly surprised and there will be interesting takeaways for start-ups and their teams. In the meantime, it is best to ignore the news and avoid the slow-moving program that this will create.

If IRAP makes sense for you and doesn't slow your start-up down you may want to talk to your IRAP rep or the consultant that helps you obtain funding via IRAP.

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