Vancouver AI company rejects U.S. government contracts citing political tensions

VANCOUVER · A Vancouver artificial intelligence firm has decided to stop pursuing contracts with the United States government. Caseway CEO Al Vigier said the move was driven by political friction, including comments from former U.S. president Donald Trump about Canada becoming a "51st state." "I'm not comfortable going in and helping the U.S. with their AI needs at the same time that they're threatening us," Vigier said. The company, which creates AI for legal and defence applications, will now prioritize work for Canadian defence and seek business in Europe and Taiwan.

The choice required the company to abandon a major chance to secure funding. Caseway had earned a spot to present at a key industry conference, one of only eight available. Vigier said such venues are where the largest funding rounds, potentially worth $50 million to $100 million, are secured. He described the overall investment climate in Canada as difficult for growth. "On the investment side, it's really bad. It's hard to raise capital in Canada," Vigier said.

This case points to a wider issue for Canada's AI sector, which depends heavily on American infrastructure and investment. Sean Mullin, a University of Toronto innovation policy expert, questioned the security of that reliance. "How can we make sure that we're not completely dependent on maybe an unreliable United States?" Mullin said. He noted the particular concern for sensitive government and defence data being processed through foreign-controlled AI models and cloud systems.

The federal government has promised funding for quantum computing, data centres and grid improvements to build domestic capacity. In a statement, it said entrepreneurs should not have to leave Canada to build competitive firms, pointing to funding plans and using the government as an anchor customer for local AI. Mullin argued Canada should not try to replicate giant AI firms but find its niche in the global supply chain. "Our strategy should be to find places within that supply chain where we can add value," he said, advising collaboration over trying to build every component locally. For Caseway, the new path involves deepening its work in Canadian defence while exploring markets in Europe and Taiwan. Vigier suggested that increased federal focus on defence could create opportunities for the company. The firm's shift shows the strategic and financial calculations Canadian tech companies are making amid cross-border uncertainties.

With files from Global News