Canada Invests Up to $1.6 Billion in AI Firm Cohere as Part of Record $7 Billion Funding Round
The Canadian government is taking an equity stake of up to $1.6 billion in Toronto-based AI company Cohere, which is raising a record $7 billion in new financing. The deal values the company at roughly $35.7 billion to $36 billion and includes commitments to keep its headquarters in Canada, invest $1.7 billion in domestic computing infrastructure by 2030, and create 1,000 technical jobs.
Prime Minister Mark Carney announced on Thursday that the Canadian government will take an equity stake in Toronto-based artificial intelligence company Cohere, investing up to $1.6 billion. The announcement was made while welcoming European Union leaders to Montreal for a summit. 
The federal investment is part of a broader funding round targeting $7 billion, making it the largest private capital raise in Canadian history. Germany's Schwarz Group, which owns the Lidl and Kaufland retail chains, is leading the round after pledging $780 million in April as part of Cohere's merger with German AI developer Aleph Alpha.
Other investors participating in the financing include Nvidia Corp., BCE's Bell Canada subsidiary, Luxembourg-based Bullhound Capital, Montreal’s Inovia Capital, and Prosperity7 Ventures, an arm of Saudi Aramco. Reports differ slightly on the exact valuation and status of the round: CBC News reports the financing values Cohere at about $36 billion and states the company has completed only an initial close without specifying how much has been committed, while The Globe and Mail and Financial Post specify a valuation of $35.7 billion and note that Cohere has secured most of the planned financing. Regardless of the precise figure, the funding establishes Cohere as Canada's most valuable privately held technology company.
In exchange for the government's investment, Cohere has agreed to remain incorporated and headquartered in Canada. The company also committed to investing at least $1.7 billion in new computing infrastructure domestically by 2030. The investment is expected to create 1,000 new high-paying Canadian technical jobs.
Cohere CEO Aidan Gomez called the government's investment "a huge honour." Chief Financial Officer Francois Chadwick stated that the financing is necessary to invest in compute infrastructure, develop AI models, and expand globally across North America, EMEA, and APAC. Schwarz Digits CEO Christian Müller added that the group plans to run Cohere's models on its STACKIT cloud.
This is not the first time Ottawa has backed the company. In 2024, a federal industrial fund awarded Cohere $240 million for processing power.
Financially, Cohere reported to investors in February that it had reached an annualized revenue rate of US$240 million in 2025. As of the third quarter, its annual recurring revenue grew 165 per cent year over year, and its customer count expanded to 300, representing a 20-fold increase over the last year. 
On the product front, Cohere recently launched a new version of its flagship software platform, North, which allows clients to set up AI agents for tasks such as financial analysis and coding. Earlier this month, the company also completed the acquisition of Aisle, a Prague-based cybersecurity startup.
Despite its rapid growth, Cohere faces competition from OpenAI and Anthropic. According to technical rankings, Cohere's models currently lag behind those industry leaders in capabilities such as coding and cybersecurity.