Sovereignty bonanza

Good morning. The Halloweekend is upon us, and if you’re a procrastinator like us, you still might not have a costume picked out. Don’t worry; we have some topical last-minute ideas you can steal: 

Today’s reading time is 5½ minutes.

Markets: The Nasdaq fell, dragged down by steep declines in Intel (down 22%) and Alphabet (down more than 12%) on weaker-than-expected earnings and mounting investor concerns about cracks in the AI boom.

Ottawa just helped Cohere become the most valuable private tech company in Canada. 

What happened: The federal government is taking an equity stake in AI lab Cohere, contributing up to $1.6 billion to the company’s latest funding round. The raise, which values Cohere at $35.7 billion, marks the largest financing round for a startup in Canadian history. 

Catch-up: The new valuation caps a year of wild growth for Cohere, which was valued at just ~$9.8 billion last September. In the last two months, Cohere expanded its European footprint, signing a merger with Germany’s Aleph Alpha and agreeing to buy Czech AI cybersecurity firm Aisle. 

Why it matters: Ottawa has made it a priority to build up Canada’s sovereign AI capabilities, looking to reduce the country’s reliance on U.S. tech giants. While they weren’t exactly flush with options, Cohere appears to be the horse that the feds are backing to make that happen. 

Bottom line: It may not have the resources to compete directly with OpenAI or Anthropic, but Cohere has carved out a nice niche catering to data-sensitive businesses, like defence contractors, banks, and government agencies. With fears growing over rogue agents and cyberattacks, the Canadian lab could very well position itself as the safe AI option.—LA

Google lost more than half a trillion dollars in market cap. After reporting disappointing earnings, Google shares sank 12.3% yesterday, erasing over US$500 billion in the biggest market value wipeout in its history. Ad sales, which account for roughly half of its revenue, missed forecasts and grew at the slowest pace in five quarters. Search traffic was a big culprit, with Google’s own, less profitable AI Mode cannibalizing search queries. (AFP)

Crypto exchange Binance was hacked. Binance founder Changpeng Zhao said the crypto exchange, the world’s largest, was breached, but added “user funds are safe.” Not everyone is so sure: The Wall Street Journal reported that multiple experts believe the attackers drained billions from the platform, enough to make it the largest cyber heist ever. Polymarket was also hacked yesterday, with reports of users’ accounts being drained. The details of these hacks weren’t revealed, but it’s widely believed that increasingly severe and frequent cyberattacks are being facilitated by AI. (CNBC)

The European Commission president still wants Canada to be an associate member. Speaking at a joint summit in Montreal yesterday, Ursula von der Leyen reiterated her desire to make Canada the EU’s first-ever associate member, despite objections to the title from some member nations. Mark Carney doesn’t seem to care much about the verbiage, saying, “This new alliance is not a marketing exercise.” (CBC News)

📡 What else is on our radar:

Small Business Month is wrapping up, but for entrepreneurs, the work continues. And there are more of them than you might think.

In case you missed it, new survey data from Ownr shows 23% of Canadians currently earn income from a side hustle, and 47% have one or are starting one.

Here's where it gets interesting: 22% of current side hustlers already make enough that they don't need a regular job, and 19% say they're likely to quit and go full-time.

Then confidence drops. According to the survey, only:

●      37% don’t know when they need to register their business

●      38% don’t understand the legal requirements that apply to them

●      42% don’t know if incorporation is right for them

Entrepreneurship should be accessible to every Canadian. Ownr helps you start, manage, and grow your business, so the leap feels less like a leap.

Download the report now.

DoorDash is acquiring Instacart in a deal that gives the latter a US$17 billion valuation. The two food delivery companies will become one as DoorDash continues to expand beyond restaurant orders for office lunches and late-night eats to groceries. The company will keep the Instacart brand intact. 

Why it matters: Prepare for more consolidation of delivery services as companies that rode high during the pandemic struggle and major players look to bolster their positions against the likes of grocery stores, Amazon, and Walmart.

The Cohere deal wasn’t the only big play the feds made for Canadian sovereignty yesterday. Say hello to the Plan for a Stronger Canada. 

What happened: Ottawa unveiled a new national security strategy for Canada, its first since 2004. Called the Plan for a Stronger Canada (we love a name that gets straight to the point), it will act as a framework to shepherd the development of new national policies focused on five areas: defence, foreign affairs, economic security, public safety, and intelligence.

Zoom in: The 13-page document is setting the stage for more detailed plans. As is, it’s pretty light on specific details and mentions several plans and policies that are already in motion, like establishing a new financial crimes agency and the Buy Canadian Policy. However, there are a few interesting potential new initiatives regarding intelligence.

Why it matters: The plan is a reaffirmation of both the moves the feds have been making all year to shore up sovereignty and Mark Carney’s Davos speech that kicked off the year by declaring the world order as we know it was dead. With a commitment to renew the strategy every four years, this could be the blueprint for navigating an uncertain security future.—QH

🌎 Hint: This lakeside city is famous for its wine vineyards, fruit orchards, and more than 2,000 hours of sunshine each year (must be nice). Its name means “grizzly bear” in the local Indigenous language, and legend has it that its lake is home to a legendary serpentlike monster named Ogopogo. 

Think you have an idea where this is? Lock in your guess here.

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🎃 ~60%. Share of Canadians across three major markets that plan to celebrate Halloween this year, according to a new poll. Torontonians appear to be the least keen to get all dressed up: only 48% of surveyed residents said they planned to hand out candy or go out on Halloween night, the lowest of any region. What’s the Halloween equivalent of Scrooge?

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