Why are Canadian AI start-ups selling to foreign firms?

By anna smith

Toronto-based Outside Intelligence Inc. has been acquired by New York-based Exiger LLC, the Canadian firm’s largest outside investor. A source familiar with the deal said it valued Outside Intelligence Inc., an Artificial Intelligence (AI) start-up, at $30 million.

This acquisition follows an interesting trend. Domestic Canadian start-ups seem to be selling to foreign buyers in their numbers. Canada has a fertile AI ecosystem. For example, it’s home to some of the world’s leading AI experts, namely the University of Toronto’s Geoff Hinton, Yoshua Bengio at University of Montreal and Rich Sutton at University of Alberta. Furthermore, researchers from University of Toronto and the University of British Columbia now hold senior AI positions with Apple, Uber, Microsoft and Elon Musk’s OpenAI.

Some are worried that foreign buyers will extract domestic AI start-up firms before they can grow into domestic giants. In the last few months, AI firms Meta Inc. of Toronto and Montreal-based Maluuba have been purchased by the Chan Zuckerberg Initiative and Microsoft, respectively. Also, Microsoft and Google have actively funded Canadian AI initiatives including Toronto’s Vector Institute.

“We’re seeing a lot of early-stage AI companies selling because there are a lot of buyers offering premiums,” said Steve Irvine, an ex-Facebook executive who moved back to Toronto to start the AI firm Integrate.ai.


Featured Articles

Sustainability, ESG, net zero in focus at must-attend event

Sustainability takes centre stage at two-day hybrid conference featuring thought leaders covering circular economy, scope 3, ESG, B Corp, net zero, DE&I

Must-attend sustainability events for executives in 2022/23

Discuss and debate the most pressing issues around sustainability at these nine executive events – from London to Abu Dhabi, San Diego to Singapore

Meet the CEO on a mission to nurture women leaders in Africa

The argument for women leaders in Africa is compelling, yet numbers are small. But one female leader is on a mission to change that – Awamary Lowe-Khan

BCG's Daniel Weise on supply chain and procurement strategy

Leadership & Strategy

Flexible work perks heat up as the war on talent rages

Human Capital

Meet the COO: Former Israel Defense Force cyber lead Parnes

Technology & AI