Canada's AI data centre push isn't about sovereignty, and the feds know it
While the Canadian government talks tough on U.S. relations, our dependence on U.S. tech giants grows
Horse and Train, Alex Colville, 1954
Getting Railroaded
An August 2025 presentation deck prepared by Innovation, Science, and Economic Development (ISED), obtained via Access to Information request, suggests a serious disconnect between what the Canadian government says its digital sovereignty goals are, and what its actions seem designed to achieve.
One of the slides shows a map of Canada, AI data centre proposals dotting the country. Among these is a facility in Cambridge, ON built by U.S. firm CoreWeave. There's an asterisk beside the company's name indicating the project is "part of the AI Compute Challenge," a federal program where ISED doles out giant gobs of money in the service of "securing domestic AI data centres that uphold data sovereignty."
The feds handed a cool $240 million to Canadian company Cohere for the express purpose of paying for compute at this data centre — meaning the money is ultimately going to CoreWeave.
An internal ISED document discussing the funding allocation suggests CoreWeave was chosen as the partner because of the company's existing deal with Nvidia — one that gives them "first access" to the U.S. chip manufacturing giant's latest GPU hardware.
All of this should be cause for alarm.
Yes, locating data within Canada is a necessary condition for digital sovereignty. It's just nowhere near sufficient. Under the 2018 U.S. CLOUD Act, any company with U.S. operations can be compelled to turn over data, even if that data lives on servers within our borders.
Similarly, building on top of U.S. manufacturers' AI tech stacks is a path to subservience. Nvidia's GPUs, for example, are dependent on the company's proprietary development environment, CUDA. The hardware may physically reside in Canada, sure.
But as Mehran Gul warns in the Financial Times, "what appears to be decentralised sovereign AI capability may end up centralising US geopolitical influence." Gul compares the worldwide AI buildout to the railway tracks once laid around the globe in service of the British Empire.
The Nvidia-CoreWeave–Cohere arrangement, whereby Canada is not only beholden to a chip manufacturer, but also to U.S. hyperscalers, strengthens the case for this interpretation.
Drinking our milkshake
Things are looking especially dire in Alberta, where U.S. tech corporations appear to be carrying out a full-scale invasion, eager to take control of resources to fuel their cloud empires.
A second slide in ISED's presentation shows a zoomed-in map of the province, where there are so many hyperscale AI data centre proposals that it would have been difficult to cleanly visualize them on the full national map.
The majority of these projects would be built by U.S. companies, and powered by on-site gas turbines.
One of these, of course, is the ludicrous Wonder Valley, pitched by Kevin O'Leary, someone who spent the early part of 2025 appearing on Fox News to cheer on Trump's annexation threats.
Another is a proposal from Crusoe, a U.S. company that in 2024 received a 600 million investment from Peter Thiel's venture capital firm Founders Fund, and just months later was given a $750 million line of credit by Brookfield.
Data centres built by Gryphon Digital (based in Las Vegas) and Beacon (Canadian, but has multiple U.S. operations) would also be subject to the CLOUD Act. Several other proposals have the proponent's name redacted.
Only two of the unredacted projects seem likely to fall outside the CLOUD Act's jurisdiction — a 90MW hyperscale data centre built in Calgary by Canadian company eStruxture, and a 650MW emissions-belching behemoth in nothern Alberta being put forward by the Woodland Cree First Nation.
But get this — a block of text beside the map notes that "the eStruxture and [REDACTED] projects are expected to target Canadian clients while the rest may primarily target U.S. clients."
It's a stunning admission. Even if you subscribe to the notion that Canada needs AI data centres: almost none of this is being built for us.
You don't have to squint very hard before the "Canadian" data centre buildout starts to look suspiciously like U.S. corporations expropriating vast swaths of fossil fuel deposits — for the benefit of U.S. clients.
Plus ça change
This coercive, extractive relationship isn't entirely new, of course. But given how frequently the feds talk about sovereignty, it's a bit jarring to see the dynamic intensifying.
Especially since the Canadian government is undeniably aware of the risks involved with our reliance on U.S. tech, even as they continue to integrate it further into our public systems.
A November 2025 briefing prepared for AI Minister Evan Solomon prior to a meeting with Microsoft Canada, obtained via Access to Information request, lays out the problem with the CLOUD Act in stark terms — then immediately repeats the company's weak assurances that everything is fine, actually:
"Microsoft stresses that disclosures involving foreign enterprise data are exceedingly rare—representing just 0.008% of all law enforcement requests, with none involving Canadian enterprise or government clients."
and
"Microsoft indicates that it does not provide any government direct access to customer data, does not weaken or bypass encryption, and challenges nondisclosure orders where possible to maintain transparency with affected customers."
Comforting, right? Good thing nothing has changed recently when it comes to Canada's relationship with our southern neighbour — a place where laws and respect for institutions still reign supreme.
On the very next page, one of the "key messages" the document suggests Solomon could convey is that "collaboration with major cloud providers like Microsoft will be essential to achieving AI adoption, compute access, and workforce readiness across the country."
We need to start asking what we stand to lose.
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