There is no denying the convergence of two powerful transformative forces in the year 2025:
1- undoing of the military doctrines, geopolitical partnerships, and the integrated economic landscape that have evolved since the end of World War II
2- the accelerating impact of artificial intelligence
Since WWII, many countries have united under the umbrella of the United States and the global security and prosperity that it created. The US-centric security blanket served the G7 well, as did the US-centric digital economy created by this partnership. During this time, US and international accounting firm consultants slowly deconstructed, intentionally, or not, any capacity for independent sovereign infrastructure, and instead pushed governments towards total dependency on California based cloud companies. But as part of an integrated global economy, policy makers embraced these concepts and the risks were ignored. But this integrated economic vision came to an end in 2024, and now we are faced with a choice of how to proceed.
The massive success these customer relationships brought to American tech companies afforded them the opportunity to provide open source code that has now become the fundamental building blocks used in virtually every modern application. Canada and the UK played their part in enabling the success of American AI players through educating and funding research that was a significant portion of the foundational technologies monetized by Silicon Valley, feeding into the revenue turbine that allowed Canadian annual spending on foreign accounting consulting firms and US Cloud companies to get to levels approaching 5% of the total federal budget. Furthermore, we happily continue to spend close to $1 billion a month on US cloud services and the foreign consulting firms that lobbied for this dependency in the first place. As the world awakes to ignored risks now turning to real crisis, thought leaders are struggling to find a way out of this long term addiction.
One way out is simple, immediately actionable, and effective both to recover sovereignty, infrastructure security, and fix innovation gaps that have left world class research regions like Canada and the UK as chronic underachievers in economic impact from innovation.
$1bil in monthly spending has two dimensions of power:
1) domestic potential that we send the USA which could be harnessed locally, and
2) customer power that should require those vendors to better listen to the needs of sovereign governments, or stand at risk of losing customers.
Cohere is a prime example of misdirected government support. The US CLOUD Act of 2018 clarifies that any US company running data centers outside the US cannot refuse Department of Justice demands to access data. Therefore, it is impossible to have data that is sovereign to Canada if it is housed in a data centre that is owned by a US company - even if the data center is in Canada. Therefore, in order to have sovereign data, it is a requirement that we have Canadian data center companies.
Yet on top of the $1bil a month Canada spends on digging further into this absolute dependency on US controlled data centers, the Canadian taxpayer is funding $240mil to Cohere to spend with a US partner to build a data center that will not even be sovereign to the taxpayers paying for it. Cohere is not open source and so there is no public good being achieved while receiving government support that ultimately just puts more Canadian data in the hands of the US government.
If Germany can commit to $1tril in military spending, certainly Canada can commit to $10 billion of digital infrastructure building. That power exists with our current elected representatives, and should be part of the discussion in this election cycle. Google and Facebook themselves have given us the open source tools to end this addiction.
Canada invented the CANDU reactor, the smart phone, and even AI itself was initially developed on Canadian soil with Canadian taxpayer funding - no Canadian should accept that we are not capable of running open source software on commercial off the shelf computers to start to build our the most fundamental resource for the digital economy. We can start today.
By simply redirecting 50% of the consulting firm and US cloud spend into alternative domestic sources, we can affect the economy locally, immediately, and for the first time, stand up for our rights as a sovereign nation that would still be a large enough customer of US cloud firms to demand adjustments to the remaining services we could continue to import from the USA.
Starting with $25M in Year 1.