Let’s get together

Good morning. And happy National Pawpaw Day to all those who observe! 

In case you don’t know, the pawpaw is an ancient North American fruit, with a custardy centre and banana-like taste. After being largely forgotten for years, they’re making something of a comeback. So, if you can find one, today’s the perfect day to try it out.

Today’s reading time is 5½ minutes.

Markets: Markets dipped yesterday after the U.S. Federal Reserve unleashed an interest rate hike, with Canada’s main stock index dropping to a nearly seven-week low. Meanwhile, Dollarama shares were up 5.5% after the retailer raised its annual sales growth forecast.

Canada’s AI leader doesn’t want to be a runner-up in the AI race, and is making a big move to prove that it's serious about winning.

What happened: Cohere and its German equivalent Aleph Alpha have agreed to the terms of a merger, five months after first announcing their intention to join forces. The deal needs to pass regulatory approval, though it already has the blessing of both nations’ governments. 

Why it matters: Cohere has made its name by focusing on sector-specific use cases rather than general-purpose products, but if it wants to truly run with the big dogs Anthropic and OpenAI, it needs to scale up. The merger, and the push to own “sovereign AI,” is part of this. 

Yes, but: For this strategy to work, Cohere needs to drastically boost its compute and raise more awareness about what sovereign AI actually entails. Per a recent survey sponsored by Cohere, more than half of execs said sovereign AI is a top priority, but a third of them couldn’t describe what it meant and just 13% said their organizations grasped the concept.—QH

The EU wants Canada as its first “associate member.” In a State of the Union address, European Commission President Ursula von der Leyen said she would “like to work with [Mark Carney] on opening the door for Canada to be the first associate member of the EU.” It’s unclear what exactly this means, but reporting suggests it could entail visa-free work and travel. Canada’s ambassador-designate to the EU tempered expectations slightly, saying “I think we’ve actually got to get to the point where we know what we’re describing.” The idea could come up again today as Carney addresses the European Parliament. (CTV News)

The Fed hiked rates for the first time in three years. The U.S. Federal Reserve raised its key interest rate by 25 basis points and implied that it would hike rates again later this year. The move is meant to stem stubborn inflation stateside. As of right now, Canada isn’t feeling quite the same pressure, and the Bank of Canada is still expected to hold rates at its next decision meeting. (Associated Press)

Alberta separation wouldn’t come cheap. A provincial government-commissioned report conducted by the University of Calgary estimated that Alberta’s separation from Canada could cost up to $170 billion over a five-year period if exit negotiations were rocky (and let’s be real, they would be). The report found that there is “certainly a scenario where Alberta’s economy and finances could be better after separation,” but they could also be weaker “for many years to come.” (CBC News)

📡 What else is on our radar:

In two new studies in the journal Science Advances, NASA researchers revealed that the agency’s Lunar Reconnaissance Orbiter found a brand-new crater on the lunar surface larger than the Roman Colosseum; it’s the largest crater ever found by the orbiter. The crater was formed by an immense asteroid impact two years ago that initially went undetected.

Why it matters: Impacts of this magnitude only happen once every 132 years on average. The timing is fortuitous, as it could lead to novel insights just as human activity on the moon increases. For example, one of the papers looked into the cooling effect that happened after the impact, which could change the surface and how rover wheels interact with it.

The new era of online shopping is picking up steam.  

Driving the news: Salesforce is the latest company to throw its hat in the AI shopping ring with the launch of its new shopper agent Carter, a tool designed to compare prices, answer customer questions, and cash them out within the chat. 

Why it matters: The ability to get products recommended by AI chatbots and agents, known as Agentic Engine Optimization (AEO), is now crucial to a business’s success. These AI bots are becoming the de facto gatekeepers of which products we’re exposed to (and thus what we buy). 

Zoom in: AEO may still be in the trial-and-error phase, but there are some steps businesses can take to boost their chances of an AI agent or chatbot recommending their product. Schwartz says one of the most important things a business can do is make sure all of their website content is written by a human (AI crawlers assign higher value to natural language). 

Bottom line: By some estimates, AI agents could account for up to 20% of the entire online shopping market by 2030. Figuring out how to get those agents to organically point to a brand or product is the next frontier of the ~US$100 billion SEO industry.—LA

With corporate concentration and a lack of competition driving prices up in groceries, banking, telecom, and more, Do Not Pass Go is your survival guide to our monopolized times.

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🏀 $76 million. Amount that the federal government is investing in a new state-of-the-art basketball facility in Etobicoke, Ontario. Dubbed “The Hub,” the centre will feature six courts and function as the new home of Canada Basketball’s national operations, but also be available for community use. Construction is slated to begin next year.

Do it for the love of the game. Play today’s mini-crossword, the daily sudoku, Codebreaker, and Who’s Who.