{"id":62250,"date":"2025-08-11T20:11:20","date_gmt":"2025-08-11T20:11:20","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/62250\/"},"modified":"2025-08-11T20:11:20","modified_gmt":"2025-08-11T20:11:20","slug":"once-an-ai-world-leader-canada-is-now-losing-the-ai-startup-race","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/62250\/","title":{"rendered":"Once an AI world leader, Canada is now losing the AI startup race"},"content":{"rendered":"

At a recent event in Montreal, Canada\u2019s minister of artificial intelligence<\/a> and digital innovation, Evan Solomon, said, \u201cCountries that master AI will dominate the future \u2013 you\u2019re either part of the bulldozer or you\u2019re part of the road. We cannot be left behind.\u201d <\/p>\n

We certainly agree with the sentiment; however, the evidence to date points to our Canadian AI ecosystem being part of someone else\u2019s bulldozer. <\/p>\n

Why? Three reasons. <\/p>\n

First, while Canada is home to 10 per cent of the world\u2019s top-tier AI researchers and was ranked first in growth of AI talent in 2023, our talent is largely working for foreign corporations and startups. This counts as creating jobs in Canada, but we are exporting the intellectual property, job creation potential and profits. <\/p>\n

A paltry 7 per cent of IP rights generated by the government\u2019s Pan-Canadian Artificial Intelligence Strategy are owned by Canadian private sector firms, according to the Council of Canadian Innovators. We cannot expect to build world-leading AI champions if the bulk of our public investment lands in the hands of others. <\/p>\n

Second, Canada is falling behind in the race to build and scale its own AI-native startups. These are companies built from the ground up with AI technology at their core. The world\u2019s fastest growing AI-native startup ecosystems are Silicon Valley, Beijing, Seattle, Paris and Tel Aviv. They are being driven ahead by the rapid transition of their startup ecosystems to AI-native. <\/p>\n

Over a decade of Startup Genome research has proven what consultant Michael Porter postulated about business clusters: The performance of a startup ecosystem grows with the number of startups it holds. So while in Tel Aviv and Paris, 22 per cent and 21 per cent of the respective startups formed in the last two years are considered AI-native, top Canadian ecosystems in Toronto, Calgary, and Montreal see just 12 per cent to 14 per cent. <\/p>\n

Canadian CEOs are embracing generative AI\u2019s speed and efficiency. The impact on their employees is less certain<\/a><\/p>\n

Success is far more likely to come to larger, more concentrated ecosystems and Canada is not currently set up to win on the global stage in this race.<\/p>\n

Third, Canada has captured just 0.7 per cent of total global funding to AI-native startups formed in 2023 and 2024, with the bulk coming from U.S. investors. Canada\u2019s AI ecosystems, like the rest of its startup ecosystems, continue to be held back due to a lack of early-stage \u2013 notably angel and seed \u2013 funding. <\/p>\n

Compare this with what\u2019s happening in the world\u2019s top AI ecosystems. <\/p>\n

Startup Genome research<\/a> highlights that approximately 90 per cent of venture funding to AI-native startups formed in 2023 and 2024 (therefore excluding Open AI) has flowed to startups formed in the U.S. and China, with Silicon Valley alone capturing 65 per cent<\/a>. <\/p>\n

Because larger ecosystems scale a higher proportion of startups, the writing is on the wall: These leading ecosystems will capture more than 90 per cent of job creation, IPOs and economic impact. <\/p>\n

Recapturing the potential of Canada\u2019s head start in AI requires a new approach. The previous government\u2019s sovereign AI strategy committed over $2-billion towards the development of Canada\u2019s computing infrastructure as well as AI adoption and lab-to-market commercialization efforts. <\/p>\n

While these are very valuable, Canada\u2019s next AI policies must prioritize significant support for the rapid growth of AI-native startup ecosystems as local, future-proof engines of job creation and economic growth. This means addressing Canada\u2019s significant gap in startup creation, seed-stage funding and support programs, as well as meaningfully supporting the \u201clab-to-startup\u201d translation of publicly funded intellectual property. <\/p>\n

To build on Mr. Solomon\u2019s analogy, it\u2019s not enough to train drivers or employees for foreign bulldozer makers. It\u2019s time to build our own line of bulldozers \u2013 and capture the outsized profits it will bring. To do so, we need to act decisively to build globally leading AI-native startup ecosystems. <\/p>\n

If we don\u2019t, we\u2019ll watch from the sidelines as AI-native startups concentrate in the U.S. and China, capturing the significant economic impacts created by AI and further eroding Canada\u2019s long-term economic and digital sovereignty. <\/p>\n

JF Gauthier<\/a> is the founder and CEO of Startup Genome<\/a>, headquartered in San Francisco. Dan Herman, PhD<\/a>, is a strategic adviser with Waterloo-based NorthGuide<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"At a recent event in Montreal, Canada\u2019s minister of artificial intelligence and digital innovation, Evan Solomon, said, \u201cCountries…\n","protected":false},"author":2,"featured_media":62251,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,901,276,277,888,902,879,877,903,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-62250","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alberta","tag-artificial-intelligence","tag-artificialintelligence","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/62250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=62250"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/62250\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/62251"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=62250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=62250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=62250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}