One of the world’s leading artificial intelligence companies, OpenAI, is exploring the possibility of building data center infrastructure in Canada, potentially tapping into the country’s low energy costs to support its growing AI operations, including ChatGPT.
The move comes as Canada seeks to strengthen its domestic AI capabilities while balancing partnerships with global tech giants. OpenAI has launched its “OpenAI for countries” initiative, positioning itself as a partner for nations seeking to expand AI infrastructure.
A Partnership With Economic Potential
OpenAI believes AI and related infrastructure will be critical to future economic development. “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 Chan Park, OpenAI’s head of U.S. and Canada public policy and partnerships, during Toronto’s Elevate Fest.
Park has met with Canadian officials, including Artificial Intelligence Minister Evan Solomon, to explore potential partnerships. OpenAI’s Canadian plans would build on its $500-billion US Stargate initiative and similar international projects.
Digital Sovereignty Concerns
Canada has been increasingly focused on “digital sovereignty” — the ability to control its own data and technological infrastructure by storing and processing data domestically. While partnering with OpenAI could accelerate AI development in Canada, experts caution it may not fully guarantee data sovereignty.
Jennifer Pybus, assistant professor at York University, said that reliance on foreign companies risks giving U.S. authorities access to Canadian data. “Most Canadian data is actually processed by American companies,” she noted. “Canada wants to have more autonomy and control over the data of Canadians here in Canada.”
Guillaume Beaumier, assistant professor at l’École nationale d’administration publique, highlighted that OpenAI is marketing digital sovereignty internationally but that U.S. legislation may limit actual control.
The U.S. Legal Framework
The 2018 CLOUD Act grants the U.S. government authority to access data held by American companies, regardless of where the servers are located. Despite ongoing Canada-U.S. negotiations over a bilateral agreement, no resolution has been reached.
Currently, much of Canada’s cloud infrastructure is owned by American tech giants such as Microsoft, Amazon, and Google. Even if data is stored locally, U.S. law ultimately governs its accessibility. Microsoft, for instance, admitted earlier this year that it “cannot guarantee” data sovereignty to European countries because of the CLOUD Act.
Additionally, the Canada-U.S.-Mexico Agreement restricts the countries’ ability to control cross-border data transfer for business purposes. Companies like Facebook can legally transfer Canadian data to U.S. centers without building Canadian facilities, highlighting the limits of domestic data control.
A Crossroads for Canada
Canada faces a complex decision: collaborating with global AI leaders like OpenAI could accelerate technological progress but may compromise full control over national data. Experts argue that a balance must be struck to foster innovation while protecting Canadian digital sovereignty.
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