Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
In a care[...]
OpenAI Secures $40B – What It Means for Canada
Funding | April 1, 2025
Image: Freepik AI
The Largest Private Tech Raise in History Just Happened
On March 31 2025, OpenAI announced the largest private tech raise in history (according to CNBC), raising a whopping $40 billion valuing the AI giant at $300 billion including major backing by SoftBank, Microsoft, Thrive Capital, and others.
OpenAI's blog post:
"Today we’re announcing new funding—$40 billion at a $300 billion post-money valuation, which enables us to push the frontiers of AI research even further, scale our compute infrastructure, and deliver increasingly powerful tools for the 500 million people who use ChatGPT every week."
OpenAI’s record-setting raise shows where AI is headed
The $40 billion raise was led by Japan’s SoftBank who contributed $30 billion together with a syndicate of other players like Microsoft, Thrive Capital, Coatue, and Altimeter who contributed the remaining $10 billion, for a $300 billion valuation.
See: Altman Rejects Elon’s Unsolicited $97.4B OpenAI Bid
Approximately $18 billion is being set aside for the Stargate Project, which is building a new network of AI data centers across the U.S. that would provide OpenAI the computing power to develop even more advanced AI systems towards artificial general intelligence or AGI.
OpenAI's flagship product, ChatGPT, now has over 500 million weekly users who rely on the tool as part of their everyday life and work. Despite such massive growth, OpenAI reported a $5 billion loss on $3.7 billion of revenue last year in 2024, and doesn't project that it'll be cash flow positive until 2029.
Global AI spending is exploding. According to a Gartner report highlighted on VentureBeat, global generative AI spending will reach $644 billion in 2025 - that's up 76% from 2024. 80% of that spend is expected to be invested into hardware infrastructure like servers, chips, and power. It's advancing a reordering of global economic power through AI infrastructure.
AI is no longer a research field, it's now global infrastructure at scale, and those building the platforms, data centers, and models today will likely control the economic upside tomorrow.
Canada’s Research Momentum Isn't Enough Anymore
Canada was ahead of the curve when it launched its initial Pan-Canadian AI Strategy in 2017. Our research labs, Mila, Vector, and Amii, are world class, and more recent efforts like Canada's $2 billion Sovereign AI Strategy, including a $300M Compute Access Fund for SME growth are important initiatives.
But in scale? They’re a fraction of what’s needed. OpenAI alone just raised 20x what Canada has committed over the next 5 years, and in the face of a projected $644 billion global spend in 2025, Canada risks being left behind unless we rethink our approach.
A Smarter Path Forward for Canada
Going toe to toe chasing gazillion parameter large language models may not be realistic, or even necessary, for Canada. There's a growing case for investing in smaller, efficient, and open source models that cost vastly less to train and operate. They also require less energy and hardware infrastructure and are relatively easy to govern and fine tune for regulated sectors.
Initiatives like Hugging Face’s tiny LLMs, ongoing research at Canadian institutions, and Cohere's $240 million AI data center project, open the door to develop an AI commercialization strategy around lightweight, safe, and sovereign models that are suitable for practical needs from fintech to healthcare and public services.
To stay in the game and lead responsibly, Canada must:
- Put more funding into AI businesses (not just research labs) that help Canadian companies turn AI ideas into real products by giving them better access to both government and private investment
- Invest and build in shared infrastructure like data centers and cloud systems here in Canada so startups and researchers don’t have to rely on foreign tech giants for computing power (👉 Brookfield Invests €20 billion in France’s AI Infrastructure)
- Focus on developing compact AI systems that are safer, cheaper, and easier to use in areas like finance, healthcare, education, and government
See: A Look Inside Canada’s AI Commercialization Challenge
- Offer incentives to banks, hospitals, utilities, and others to choose local AI solutions instead of imported ones
- Create smart and agile regulations that keep AI safe and fair without blocking new ideas or slowing down growth
- Make Canada a magnet for top AI talent. Give companies, developers, researchers access to the tools, compute power, and support they need to build in Canada and thrive here
Why It Matters
AI is out of the bottle and no longer just research. It's forging global infrastructure for the future economy. While Canada still has amazing talent and values, without larger investment, smarter models, and real infrastructure at home, we risk being left behind. Canada should be building smaller, safer, and sovereign AI ecosystem that works for Canadians and the world.
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