Canada Courts UAE and Saudi Investment to Build Sovereign AI Infrastructure

Canada Pursues AI Investment Through Partnerships with UAE and Saudi Arabia

The Canadian government is actively seeking global partnerships to build sovereign artificial intelligence (AI) infrastructure and retain promising AI companies within its borders. AI Minister Evan Solomon recently highlighted ongoing discussions with the United Arab Emirates (UAE) and Saudi Arabia, both major investors in AI technologies, as part of this strategy.

Canada’s goal is to establish a strong AI industrial base supported by foreign capital, data centres, and technology firms. Prime Minister Mark Carney has emphasized the importance of large-scale projects like data centres to reduce Canada’s dependency on U.S. trade. The government has committed $2 billion to expand AI computing capacity and has proposed $15 billion more to encourage pension funds to invest in data centre operators.

Strategic Partnerships for Sovereign AI Infrastructure

Minister Solomon described the UAE as “a very sophisticated player along the entire value chain” of AI. The country’s state-backed firm G42 is developing a multi-billion-dollar, five-gigawatt AI campus in Abu Dhabi and has collaborated on U.S. compute clusters using advanced chips. Similarly, Saudi Arabia’s Public Investment Fund recently launched Humain, a company focused on AI data centres and model development, backed by up to US$100 billion in sector investment.

Canada’s engagement with these nations is part of a broader effort to diversify partnerships beyond traditional allies like the U.S. and France. Despite existing political and commercial challenges, the government is approaching these discussions pragmatically and with full transparency.

Balancing Sovereignty and International Collaboration

Building sovereign AI capacity requires access to significant hardware and capital, which Canada cannot currently produce independently. The government acknowledges that complete AI self-reliance isn’t feasible. For example, Cohere, a Toronto-based AI company, received $240 million in federal funding to purchase computing capacity from a Canadian data centre built by the U.S.-based CoreWeave using Nvidia chips.

This reliance on foreign technology has raised concerns among Canadian hardware firms. However, Minister Solomon stressed that while some hardware originates abroad, intellectual property, company headquarters, and jobs remain in Canada. The government aims to keep these companies rooted domestically rather than allowing them to be acquired and diminished by foreign entities.

Government Procurement as a Growth Lever

The federal government plans to leverage its procurement power to support Canadian AI companies. By awarding contracts to domestic firms, the government helps them scale, gain credibility, and attract private investment. This approach also improves public service efficiency through advanced AI technologies.

Looking Beyond the Middle East

Canada is also exploring partnerships with other countries such as France, Germany, the United Kingdom, and India. These nations are similarly aiming to diversify their economic relationships and investments in AI. Minister Solomon noted that global interest in investing in Canada has never been higher, but competition is intense.

Key Takeaways for Government Stakeholders

• Canada aims to build sovereign AI infrastructure but requires international capital and technology partnerships.
• Discussions with UAE and Saudi Arabia are advancing, recognizing their significant AI investments.
• While foreign-made hardware is necessary, Canada prioritizes keeping IP and operations domestically to retain control.
• Government procurement will play a crucial role in nurturing Canadian AI companies and expanding their market reach.
• Broader global engagement is underway to diversify sources of AI investment and collaboration.

For public sector professionals involved in AI policy and infrastructure, understanding these strategic moves is essential. Building a competitive Canadian AI ecosystem involves balancing sovereignty with openness to global partnerships, ensuring both growth and national interests are protected.

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