Canada’s AI Potential is Being Harvested by Others—But a Bold New Fund Aims to Change That
In a move that could reshape the future of Canadian innovation, Mila, a leading AI research institute, and Inovia Capital have announced a groundbreaking $100 million venture capital fund. Their mission? To keep Canada’s AI talent and breakthroughs from being exported abroad, and instead, fuel homegrown entrepreneurship in this rapidly evolving sector. But here’s where it gets controversial: despite being home to 10% of the world’s top AI researchers, Canada captures less than 2% of global AI venture capital investment. Why is this happening, and can this new fund turn the tide?
The Venture Scientist Fund isn’t just another investment vehicle—it’s a strategic bridge between cutting-edge research and market-ready solutions. Integrated with Mila’s programs and those of Alberta’s Amii and Toronto’s Vector Institute, the fund aims to back over 55 startups focused on fundamental AI, next-gen IT, and physical infrastructure. This isn’t just about writing checks; it’s about creating an ecosystem where researchers and founders collaborate seamlessly. As Mila CEO Valerie Pisano puts it, “I want to make sure they don’t even have to cross the hall.”
But here’s the part most people miss: Canada’s AI underperformance isn’t just a numbers game. According to a joint report by Mila and Bain & Company, nearly 70% of Canadian-led AI startups are headquartered outside the country. AI Minister Evan Solomon bluntly sums it up: “Canadian talent gets harvested by other countries. We plant the seed, we water, we fertilize, we grow, and someone else harvests. It’s not going to happen anymore.” Bold words, but can this fund deliver?
The timing is ripe. In 2024, 30% of Canadian VC funding was allocated to AI—double the share from 2022. With $11.5 billion in dry powder in the Canadian venture ecosystem, the groundwork is fertile. Yet, there’s an “acute funding gap” for research-driven AI companies at the pre-seed and seed stages, as highlighted in a letter from AI institutes to Minister Solomon last year. This fund aims to fill that void, but questions remain: How much of the $100 million is secured? Will the federal government step in through initiatives like the Venture Capital Catalyst Initiative (VCCI)? Stéphane Marceau, Mila’s managing director of AI ventures, remains tight-lipped but teases, “There is more to come.”
And this is where it gets even more intriguing: The fund’s launch comes less than a year after Mila appointed Marceau to transform AI researchers and STEM graduates into “venture scientists”—individuals who can monetize their intellectual property. Think of Element AI, spun out of Mila in 2016 and sold to ServiceNow in 2020. That’s the kind of success story this fund hopes to replicate. But with AI investment globally hitting $176.5 billion in the first three quarters of 2025, can Canada truly compete?
Mila’s scientific director, Hugo Larochelle, points out that AI still has glaring weaknesses—like reliability and physical task performance—that startups can tackle in the short to medium term. This fund isn’t just about catching up; it’s about positioning Canada as a leader in the next wave of AI innovation. But here’s the question we’re left with: Is $100 million enough to catalyze meaningful change, or is it just a drop in the ocean of global AI investment?
What do you think? Is Canada doing enough to retain its AI talent and innovation? Will this fund be a game-changer, or is it too little, too late? Let us know in the comments—we’d love to hear your take on this bold initiative and its potential impact on Canada’s AI landscape.
