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Canada bets on sovereign AI as screening regimes tighten globally
Ottawa's new strategy treats artificial intelligence as critical infrastructure, while investment barriers rise worldwide.
Prime Minister Mark Carney released Canada's new artificial intelligence strategy on Thursday (2026-06-04), pledging to treat AI as critical infrastructure on par with energy and positioning the country to lead middle powers in the sovereign AI race.3
Global investment flows are already tightening fast around the same technologies. UNCTAD calculates that 63% of global investment flows were subject to a screening regime last year, up from 52% in 2020, and the number of new restrictive measures hit a record in that same period with the trend extending since.1 Ottawa's move signals a belief that the window for building independent AI capability is narrowing.
The strategy lands amid a broader push by governments to control cross-border technology flows. Industries accounting for 60% of the value of America's stockmarkets now fall under the potential remit of CFIUS, based on deals submitted to the committee in 2021.1 Britain's 17-sector screening regime covers 35% of large listed firms in the country.1
In Europe, 29% of foreign investment referrals underwent detailed scrutiny in 2021, a share that has grown as governments treat national security reviews as standard rather than exceptional.1 For energy and commodity traders, the implication is direct: technology transfer restrictions increasingly govern which projects attract capital and which do not.
The US is pushing further. National Security Advisor Jake Sullivan said his administration is "formulating an approach to address outbound investments in sensitive technologies."1 Washington holds that American capital must not fuel rival capabilities. A broader regime could redirect a portion of the $171bn a year the US spends on foreign direct investment in new projects.1
China approaches the dynamic from the other side. Military modernization and AI breakthroughs dominate US policy attention, but Beijing's United Front strategy has focused on quiet technology transfer through Western partnerships.4 The effort targets the same sensitive sectors that screening regimes now aim to block.
Canada's Carney is betting that middle powers can build sovereign AI without being squeezed between the US and China. The strategy requires talent, and talent is scarce. LinkedIn data show AI created 1.3 million jobs globally in 2024-25.2 Competing for that pool against US tech salaries and Chinese state-backed recruitment will test Ottawa's budget commitments.
The AI-as-infrastructure framing echoes how governments treated energy networks in the 20th century. Treating AI on par with electricity grids or pipelines implies a readiness to subsidise, protect and potentially ration access.3 For markets, sovereign AI strategies are increasingly shaping demand for compute power and the energy required to run it.
The US-Canada defense industrial base alignment adds another layer. Both countries are racing to rebuild capacity, recognising that future conflicts hinge on technology as much as ammunition.5 AI sovereignty is becoming a joint security objective, not just an industrial policy question.
Whether other middle powers follow Canada's lead with their own critical infrastructure designations for AI is the forward signal to track. The UNCTAD data show a clear direction: screening regimes are proliferating, and the technologies deemed too sensitive to share keep expanding.1