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Canada struggling to turn AI expertise into AI profits

Some analysts say Canadian investment is being funneled into interests outside the country
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A person types on a laptop computers as President of the Treasury Board Anita Anand speaks during an Artificial Intelligence roundtable attended by AI experts and leaders from across Canada in Gatineau, Que., on Monday, May 27, 2024. THE CANADIAN PRESS/Sean Kilpatrick

It has impressive research bench strength. It has billions of federal dollars for the taking. It91裸聊视频檚 kind of a nice place to live.

But when it comes to turning knowledge of artificial intelligence into companies, products and investment, Canada is lagging behind 91裸聊视频 and, some experts argue, actively shooting itself in the foot.

Why give up all that brain power to Silicon Valley?

That was a major line of questioning as Prime Minister Justin Trudeau spoke recently with tech journalists on a niche New York Times podcast.

91裸聊视频淲e91裸聊视频檙e proud of Canada91裸聊视频檚 early role in developing AI,91裸聊视频 Trudeau said on Hard Fork, noting that many breakthroughs have happened because Canadian scientists are well-funded.

In 2017, Canada became the first country to have a national AI strategy. It launched a second phase five years later, allocating $443 million to connect research capacity with programs aimed at enabling commercialization.

This year91裸聊视频檚 federal budget included an additional $2.4-billion investment in AI. And the government has boasted that Canada has 10 per cent of 91裸聊视频渢he world91裸聊视频檚 top-tier AI researchers, the second most in the world.91裸聊视频

Among them are two so-called godfathers of AI.

But Ottawa is 91裸聊视频渇ighting to make sure we keep our skin in the game,91裸聊视频 Trudeau told the podcast hosts.

He made the pitch, saying Canada has many of the ingredients it needs: among other things, clean energy, a good quality of life for workers and government programs to encourage the sector.

In spite of that, Canada hasn91裸聊视频檛 always been 91裸聊视频済reat at commercializing,91裸聊视频 Trudeau conceded.

More than that, Canadians have 91裸聊视频渇allen far behind,91裸聊视频 argued Benjamin Bergen, president of the Council of Canadian Innovators, which represents the tech sector.

The government spent 91裸聊视频渁 tremendous amount on the talent side of the equation,91裸聊视频 he said recently, but not on converting it 91裸聊视频渋nto building companies.91裸聊视频

Bergen said the government has 91裸聊视频渋nstitutionalized the transfer of our AI intellectual property to foreign firms.91裸聊视频

The government91裸聊视频檚 2022 strategy update promised that the country91裸聊视频檚 three AI institutes are 91裸聊视频渉elping to translate research in artificial intelligence into commercial applications and growing the capacity of businesses to adopt these new technologies.91裸聊视频

But Bergen argued an AI strategy focused on commercialization must start with Canada owning its own IP. 91裸聊视频淵ou cannot commercialize what you don91裸聊视频檛 own.91裸聊视频

Intellectual property lawyer Jim Hinton has been trying to quantify that problem.

And the numbers show 91裸聊视频渁 train wreck I91裸聊视频檝e been watching happen in slow motion,91裸聊视频 he said.

About three-quarters of patents produced by researchers who work for Toronto91裸聊视频檚 Vector Institute and Montreal91裸聊视频檚 Mila leave the country, and most of these are in the hands of Big Tech, Hinton91裸聊视频檚 research has found.

Another 18 per cent of the 244 patents he tracked 91裸聊视频 198 from Vector and 46 from Mila 91裸聊视频 are now owned by North American academic institutions.

Just seven per cent are held in the Canadian private sector.

Of the foreign-owned patents, the largest number, 65, went to Uber, while 35 landed with the Walt Disney Company. Nvidia, which recently displaced Microsoft as the world91裸聊视频檚 most valuable company, got 34.

IBM ended up with 15 and Google with 12. A handful of the patents were co-owned.

Foreign companies benefit from Canada91裸聊视频檚 public funding, Hinton argued, and there are 91裸聊视频渘o guardrails put on the ability for these foreign companies to basically pillage Canada91裸聊视频檚 really good AI invention.91裸聊视频

Researchers can work at the AI institutes and foreign tech companies at the same time, Hinton said, charging that this is what allows the tech giants to take advantage.

The Canadian Institute for Advanced Research, which co-ordinates the government91裸聊视频檚 AI strategy, pushed back strongly on that assertion.

Executive director Elissa Strome said a 91裸聊视频渟mall number of our researchers91裸聊视频 have part-time employment in the private sector.

91裸聊视频淭hose private-sector organizations own the rights to the IP that is generated by those researchers,91裸聊视频 she said, but only when they91裸聊视频檙e on the clock for those companies.

Strome said it91裸聊视频檚 long-standing practice in Canadian research 91裸聊视频渢hat there are relationships around contract research with industry,91裸聊视频 and 91裸聊视频渁 really strong firewall91裸聊视频 is in place between IP generated via public funds at the AI institutes and that which is generated through private funds.

She said Hinton91裸聊视频檚 statistic on patents was inaccurate, but did not provide data to refute his findings.

She also argued that patents are not a good measure of commercialization, and 91裸聊视频渋t91裸聊视频檚 the people that we91裸聊视频檙e training in the AI ecosystem that actually hold the greatest value in AI, not patents.91裸聊视频

When it comes to sponsorship agreements at Toronto91裸聊视频檚 Vector, any IP created at the institute 91裸聊视频渂elongs to Vector,91裸聊视频 a spokesperson said, adding it is not the primary employer for most of its researchers.

If academics don91裸聊视频檛 have an opportunity to work for companies, they91裸聊视频檙e more likely to leave altogether, Montreal91裸聊视频檚 Mila said in a statement. It said the three institutes have turned around a 91裸聊视频渕assive brain drain in AI in Canada91裸聊视频 that existed prior to 2017.

The multi-billion-dollar investment in this year91裸聊视频檚 budget seeks to further protect against that brain drain by beefing up Canadian infrastructure and computing power.

The envelope includes a 91裸聊视频渞elatively small91裸聊视频 amount of money to help Canadian companies scale up, noted Paul Samson, president of the Centre for International Governance Innovation.

Overall, the government is 91裸聊视频渄oing the right thing91裸聊视频 by ensuring that91裸聊视频檚 part of the equation, he said.

But people in the tech sector are skeptical. Bergen said companies were given little time to provide input.

91裸聊视频淭he government already had a top-down strategy that it wanted to implement 91裸聊视频 and didn91裸聊视频檛 really care what CEOs and leaders of domestic firms were actually needing in order to be successful,91裸聊视频 he said.

Nicole Janssen, co-CEO of AI company AltaML, raised the concern that the Canadian government might end up simply throwing money at American firms to move north.

91裸聊视频淲hat I91裸聊视频檓 trying to figure out is how the government thinks they91裸聊视频檙e going to spend $2 billion on building computers without just handing that $2 billion to Microsoft,91裸聊视频 Janssen said.

The budget said the money would go towards both access to computational power and developing AI infrastructure that is Canadian-owned and located in Canada.

A spokesperson for Industry Minister Fran莽ois-Philippe Champagne said more details would be provided in the coming weeks.

Companies like Microsoft and Nvidia are already looking to Canada as a place to build computing infrastructure, Janssen said, due to factors like climate and relative political stability.

91裸聊视频淲e don91裸聊视频檛 need to do anything to attract them.91裸聊视频

A better approach, Janssen said, would see the government helping Canadian firms adopt AI more quickly 91裸聊视频 a gap her company has been trying to help fill.

It takes AltaML an average of 18 months to start building an AI product in Canada, she said, compared to four months in the United States.

91裸聊视频淲e definitely do not have the ecosystem of companies that you would expect for the amount of talent that we have,91裸聊视频 she said.

There91裸聊视频檚 real clout at Canada91裸聊视频檚 AI institutes, with veterans Yoshua Bengio and Geoffrey Hinton heading up Mila and Vector, respectively.

They and other elite researchers have 91裸聊视频渁ttracted students from all over the world to come study under them,91裸聊视频 said Janssen, and that91裸聊视频檚 a big advantage for Canada, especially if it wants, as Trudeau said on the podcast, to lead in developing a more democratic AI.

The prime minister said one of his biggest preoccupations is maximizing 91裸聊视频渢he chance that it actually leads to better outcomes and better lives for everyone91裸聊视频 instead of only benefiting those 91裸聊视频渨ith the deepest pockets.91裸聊视频

Canada could be a leader in responsible AI, Janssen said.

91裸聊视频淭hat is a title that is up for grabs,91裸聊视频 she said. 91裸聊视频淎nd no one has grabbed it yet.91裸聊视频

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