US says Canada can build sovereign AI, but not at the expense of American tech

A US Embassy official in Ottawa told Global News on Friday that while the United States is behind Canada in its quest for sovereign AI capability, it cannot be done at the expense of superior US technology.

The embassy held the briefing on background, so the official could not be named while discussing Washington’s AI policy candidly. The official said, “I see no issue with Canada promoting Canadian companies,” drawing the parallel to Washington’s own AI export plan. The caveat came immediately after. Where Canadian firms lead a niche they should sell globally, the official argued, and where US companies are stronger the two governments should be selling jointly as allied partners.

Washington backs Canada’s AI sovereignty with limits

The briefing pointed to two areas of existing alignment. One is export controls, aimed at keeping AI technology and intellectual property out of the hands of rival states. And the other is China, where the official says closer cooperation will work to offset the influence of China within multilateral standard-setting organizations, to make sure that China does not set the conditions for how others use AI technology.

The AI strategy issued by the Trump administration in July 2025 attempts to reduce regulations and speed up approvals for very large data centers, while ensuring that the United States maintains its leadership in the technology and export it to its allies.

Canadian firms have already signed onto American-led export consortia, selling hardware into the same deals as US suppliers, the official said. The official also argued that a fully domestic build across hardware, models, and software is not a rational goal for a country Canada’s size, warning that the cost and the timeline would both run high and that Canada’s AI sector would end up trailing.

Canada-US split on who should police AI

Canada is moving on privacy and online harms legislation that could carry steep fines for AI companies that fail to comply, and those penalties would reach the US companies that hold most of the market.The US official shifted the responsibility onto the industry itself by saying that the firms that build such systems are more capable of interpreting consumer demands than the regulators, and this ability constitutes innovation.

On data centers, the official said companies should engage local communities directly on what those projects raise, among them water consumption, the effect on power bills, and noise. The official defended against any of this as evidence that there should be no regulations at all, and described the preferred strategy as one that is risk-based and technologically adaptive.

The official, however, declined to comment on Canadian legislation regarding online harms and privacy, nor did they indicate if artificial intelligence collaboration is part of the wider discussion happening before the August 19 deadline.

Canada’s own strategy leaves the US off the alliance list

The friction lands against a plan Ottawa published weeks earlier. Carney’s AI for All strategy targets lifting Canada’s AI adoption rate from 12% to 60% by 2034, creating more than 250,000 jobs, and adding CAD $200 billion to the economy through productivity gains, per the International Association of Privacy Professionals. It is based on the input of more than 11,000 participants and work done by an AI Strategy Task Force, which recommends modifying data protection regulations to deal with deepfakes and surveillance pricing.

“AI is here,” Carney said at the launch, framing the question as whether the technology improves life for all Canadians or only a few. The international alliances aspect of the strategy relies on the Sovereign Technology Alliance that was established in partnership with Germany in February as well as relationships with Australia, Europe, India, Qatar, Saudi Arabia, and the UK. The US is not mentioned.

As Cryptopolitan earlier reported, Ottawa has been pushing the sovereignty agenda since the June launch. AI minister Evan Solomon has, however, admitted the necessity of this dependency, saying during last month’s US-Canada Summit in Toronto that “sovereignty is not solitude,” adding that the US is Canada’s largest and most significant partner.

Ipsos polling this year put American enthusiasm for AI products and services at 33%, third from the bottom across the countries surveyed, with Canada lower still at 26%.

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