A US Embassy official in Ottawa told Global News on Friday that the United States supports Canada's pursuit of sovereign AI capability — but not if it comes at the expense of adopting superior American technology.

The briefing was held on background, meaning the official could not be identified while speaking candidly about Washington's AI policy. The official struck a measured tone: "I see no issue with Canada promoting Canadian companies," they said, comparing it to Washington's own AI export strategy. However, the caveat followed immediately. Where Canadian firms hold a competitive edge in a specific niche, they should be encouraged to sell globally; where US companies are stronger, the two governments should market jointly as allied partners.

Washington Backs Canadian AI Sovereignty — With Conditions

The official identified two areas of existing alignment between the two countries. The first is export controls, designed to keep AI technology and intellectual property away from rival states. The second is China: the official said closer cooperation would help counter Beijing's influence in multilateral standard-setting bodies, ensuring that China does not dictate the terms under which other nations deploy AI. The push reflects a broader US effort to align allied nations around shared AI governance principles, an effort that has gained traction as countries across Europe and the Indo-Pacific pursue their own domestic AI capabilities.

The Trump administration's AI strategy, issued in July 2025, seeks to reduce regulatory barriers and accelerate approvals for large-scale data centers while preserving US technological leadership and facilitating exports to allied nations.

Canadian firms have already joined American-led export consortia, the official noted, selling hardware alongside US suppliers under the same arrangements. The official also argued that a fully domestic AI build — encompassing hardware, models, and software — is not a realistic objective for a country of Canada's size, cautioning that the costs and timelines would be prohibitive and that Canada's AI sector would ultimately fall behind. Canada's ambitions draw on a deep research foundation — the country is home to deep-learning pioneers including Toronto-based Geoffrey Hinton and Montreal-based Yoshua Bengio, whose work helped launch the current AI era — but building a competitive commercial stack spanning semiconductors, foundation models, and applications requires resources and infrastructure that go well beyond research strength.

Canada-US Divergence on AI Regulation

Canada is advancing privacy and online harms legislation that could impose significant fines on AI companies for non-compliance — penalties that would extend to the US firms dominating the Canadian market. The regulatory direction aligns Canada more closely with the European Union's risk-tiered model of AI governance than with the deregulatory posture Washington has adopted. The US official deflected the regulatory question toward industry self-governance, arguing that companies building AI systems are better positioned than regulators to interpret consumer demands, and that this capacity is itself a form of innovation.

Regarding data centers, the official said companies should engage directly with local communities on concerns such as water consumption, electricity costs, and noise. While pushing back against the notion that these issues justify heavy-handed regulation, the official described the preferred US approach as risk-based and technologically adaptive.

The official declined to comment on Canada's pending online harms and privacy legislation, and did not indicate whether AI collaboration is part of the broader bilateral discussions underway before the August 19 deadline.

Canada's Strategy Omits the US From Its Alliance List

The friction comes against the backdrop of an AI strategy Ottawa released weeks earlier. Prime Minister Carney's "AI for All" plan aims to raise Canada's AI adoption rate from 12% to 60% by 2034, generate over 250,000 jobs, and add CAD $200 billion to the economy through productivity gains, according to the International Association of Privacy Professionals. The strategy drew on input from more than 11,000 participants and the work of an AI Strategy Task Force, which recommended updating data protection rules to address deepfakes and surveillance pricing.

"AI is here," Carney said at the launch, framing the central question as whether the technology will improve life for all Canadians or only a privileged few. The strategy's international component centers on the Sovereign Technology Alliance, established in partnership with Germany in February, along with relationships with Australia, Europe, India, Qatar, Saudi Arabia, and the UK. The United States is not mentioned — an omission that mirrors a broader pattern among mid-sized democracies working to reduce single-vendor dependence in critical technologies.

As Cryptopolitan previously reported, Ottawa has been advancing the sovereignty agenda since the June launch. AI Minister Evan Solomon has acknowledged the reality of interdependence, however, telling last month's US-Canada Summit in Toronto that "sovereignty is not solitude," and noting that the US remains Canada's largest and most significant partner.

Ipsos polling conducted this year placed American enthusiasm for AI products and services at 33% — third from the bottom among countries surveyed — with Canada even lower at 26%.