Artificial intelligence in Canada is being driven by business ambition, regulatory uncertainty and a demand for technological sovereignty. Inside Cohere, the country’s leading foundational model developer, legal and business stakes are climbing as quickly as the technology itself.
Canadian companies, governments and international partners want alternatives to US-based AI providers, and Cohere is the only Canadian player at this scale. “There’s really been an impetus for Canadian companies, governments, as well as companies internationally, like in the UK and Europe, to look outside the US for partners in this space,” says Kosta Starostin, general counsel at Cohere. While many now build with AI, few foundational LLM companies exist – Cohere stands alone in Canada.
For enterprise customers, legal risk comes first. “The biggest issue for many executives who want to adopt this technology inside their organizations is figuring out how to future-proof it for the business, because it is a very intricate and novel technology, in a rapidly evolving landscape,” Starostin says. Business leaders face a steep learning curve; education starts with what a foundational model does, what it can and cannot do, and what it takes to move from proof of concept to ROI.
Technical hurdles are steep. For business owners, implementing this technology means committing serious time, resources and skilled engineering. Integrating large language models into existing systems and ensuring performance takes expertise. Early adopters must justify major investments to their boards without any guarantee of success.
Cohere targets enterprise, not consumer chatbots, developing AI to automate business workflows and embed advanced models into client products. That focus doesn’t shield the company from legal and regulatory scrutiny. “Those decision-making points are also underpinned by legal and regulatory concerns because …the compliance teams, the security teams, are going to ask a lot of questions,” he says. Data security, privacy and training data provenance are all under the microscope.
Cohere offers deployment models that keep customer data isolated, using virtual private cloud or on-premise services, so the company never sees the data. “It’s all within the ecosystem of the company; they control everything,” Starostin says. That approach has proven to be a “major benefit in the way that we’ve operationalized the business, and it’s been a huge success for Cohere,” he says.
The regulatory landscape is shifting fast, with little clear legal guidance as rules are still being developed in the EU and US. Cohere’s answer is to build on “really good foundational principles of development, like security by design, and privacy by design, and really build that into our process,” he says.
Cohere is in direct talks with governments in the US, Canada and abroad. With so few core LLM developers, “We often get invited to all the rooms where these issues are discussed.” The top priority is making sure regulators understand the difference between business-to-business and business-to-consumer AI. “We’re very squarely in the B2B camp. We don’t have any direct-to-consumer products, so what we want to ensure when we talk to policy makers and regulators, is that there’s an appreciation for that distinction, and they’re not painting everything with a broad brush where we may get looped into the same framework as the B2C guys,” he says.
Governments in Canada and the UK are demanding data and AI sovereignty, pushing Cohere and others to localize technology and infrastructure. The company’s deal with the Canadian government to build domestic data and compute centres reflects this. “They view it as a critical national security asset and interest,” he says.
At Cohere, legal and business strategy are tightly linked. Starostin credits his team for keeping him informed and freeing him to focus on big-picture priorities. “I have an incredible team,” he says. The company’s core legal expertise spans privacy, regulatory affairs, commercial contracting, intellectual property, corporate governance, compliance and employment law. Many legal issues, even in intellectual property, are uncharted territory. “A lot of the legal issues actually are novel,” he says.
Starostin urges young lawyers to bring curiosity, ambition and resilience with them. Curiosity fuels growth, ambition drives improvement, but resilience sets people apart when things go wrong. “As lawyers, if you can be the voice of calm and reason and make your stakeholders feel that no matter what, you’ve got this and we’re going to figure it out together, that makes you the best kind of ally one can imagine.”