OpenAI, the company behind ChatGPT, is exploring the possibility of building massive data center infrastructure in Canada. The proposal presents a complex challenge for the Canadian government, which is simultaneously pursuing a national strategy of "digital sovereignty" to maintain control over its own data and technological future.
While OpenAI suggests a partnership could help Canada become a leader in artificial intelligence, experts warn that partnering with a major U.S. firm could undermine the very autonomy the country seeks to establish, largely due to American laws that can reach across borders.
Key Takeaways
- OpenAI is in discussions with Canadian officials about building AI data centers on Canadian soil, citing the country's abundant and affordable energy.
- Canada is actively pursuing "digital sovereignty," a policy aimed at controlling its own data and reducing reliance on foreign technology infrastructure.
- A key concern is the U.S. CLOUD Act, which allows the American government to compel U.S. companies to hand over data, regardless of where it is stored globally.
- Experts are divided, acknowledging the need for international expertise while cautioning against ceding control of critical digital infrastructure to foreign entities.
OpenAI's Canadian Expansion Plans
OpenAI is actively looking to expand its global network of data centers, the physical backbone required to power its AI services like ChatGPT. The company has identified Canada as a potential location, building on its ambitious $500 billion Stargate initiative in the United States and similar projects worldwide.
During an interview at Toronto's Elevate Fest, Chan Park, OpenAI's head of U.S. and Canada public policy, highlighted Canada's advantages. He noted the country's resources and desire to be a leader in the technology sector.
"There are so many different elements that go into building an AI model that Canada has in abundance, whether it's the power and the resources — and frankly, the wherewithal and the desire — to really be a leader in the technology," said Park.
Park has held meetings with key Canadian officials, including Artificial Intelligence Minister Evan Solomon, to discuss a potential partnership. The company is framing its expansion as part of its "OpenAI for countries" initiative, which aims to help nations build what it calls "democratic AI."
The Push for Digital Sovereignty
The timing of OpenAI's interest coincides with a growing movement within Canada for greater control over its digital destiny. The concept of digital sovereignty has become a priority for politicians and policy experts who are wary of foreign influence, particularly from an increasingly protectionist United States.
What is Digital Sovereignty?
Digital sovereignty refers to a nation's ability to control its own digital infrastructure, data, and technology. This includes ensuring that data generated by its citizens is stored domestically and governed by national laws, free from the jurisdiction of foreign governments.
A primary concern is that data processed by foreign companies, even on Canadian soil, remains subject to the laws of the company's home country. "I think people are very concerned that most Canadian data is actually processed by American companies,” said Jennifer Pybus, an assistant professor and Canada Research Chair in data, democracy and AI at York University.
According to Pybus, the goal for Canada is to "have more autonomy and control over the data of Canadians here in Canada.” This has led to a push to support domestic AI models and data storage solutions.
The Shadow of the U.S. CLOUD Act
The most significant legal hurdle to a potential OpenAI-Canada partnership is the U.S. CLOUD Act of 2018. This legislation grants American authorities the power to demand data from U.S.-based technology companies, no matter where in the world the servers are located.
This means that even if OpenAI built data centers in Canada, the information stored within them could still be accessed by the U.S. government. Guillaume Beaumier, an assistant professor at l'École nationale d'administration publique, expressed skepticism about OpenAI's claims of promoting Canadian sovereignty.
"To be honest, I think we can be very critical of the extent to which it's going to be able to achieve and promote greater Canadian sovereignty," he said, citing the CLOUD Act as a primary reason. Most of Canada's existing cloud infrastructure is already owned by American giants like Microsoft, Amazon, and Google, placing Canadian data under U.S. legal reach.
A Precedent in Europe
The power of the CLOUD Act is not theoretical. Earlier this year, Microsoft executives admitted to a French hearing committee that the company "cannot guarantee" data sovereignty to European Union members because it is legally bound to comply with U.S. law.
OpenAI also holds significant contracts with the U.S. government, including a recent $200 million deal with the Department of Defence. This deep relationship with the American government adds another layer of complexity for Canadian officials aiming for digital independence.
Balancing Innovation and Autonomy
Despite the risks, experts agree that Canada cannot afford to isolate itself from the global AI ecosystem. Shutting out major international players like OpenAI could hinder the country's technological advancement and leave it behind in a transformative economic field.
“I think we've got to be pragmatic here. We can't be walling off the border and thinking that digital infrastructure is something that Canadian firms can solve solo," said Benjamin Bergen, president of the Council of Canadian Innovators. He acknowledged a "net benefit" in using foreign expertise but stressed that any loss of autonomy must be carefully weighed.
The Canadian government maintains a cautious stance. A spokesperson for Minister Solomon stated that his meetings with tech leaders "do not represent endorsement or active negotiations." They emphasized a key condition for any project:
"Our priority is ensuring that any AI or digital infrastructure built in Canada — whether by domestic or international partners — operates fully within Canadian laws and regulatory, security, and privacy frameworks."
The Case for Homegrown Solutions
The debate highlights the need to bolster Canada's domestic technology sector. Companies like Toronto-based Cohere, which recently partnered with the federal government, represent a homegrown alternative for building sovereign AI capabilities.
Advocates for this approach argue that supporting Canadian firms is essential for long-term digital independence. "Are they at the scale of Amazon or OpenAI? No," Bergen said. "But you’ve got to begin somewhere in terms of supporting firms that are able to do forms of digital technology that we view as sovereign, and that are just non-negotiable."
The Environmental Cost of AI
Beyond sovereignty, the resource intensity of data centers is a major factor. According to estimates cited by Jennifer Pybus, the electricity required could be equivalent to powering 8 to 10 million Canadian homes. Furthermore, some data centers use up to a billion gallons of water per year for cooling systems, placing significant strain on local resources.
As Canada navigates its AI strategy, it faces a critical decision: whether to partner with a global giant for rapid advancement at the potential cost of autonomy, or to invest more heavily in its domestic ecosystem to build a truly sovereign digital future.