Mila, Bain & Company urge fivefold boost in Canadian AI VC

Mila - Quebec Artificial Intelligence Institute and Bain & Company have set out a plan for Canada to convert more of its AI research strength into domestically headquartered startups and larger pools of venture capital.

The organisations have co-written a report titled "The Rise of the Canadian Venture Scientist". It argues that Canada holds a disproportionate share of global AI research talent compared to other markets in venture creation and retained economic value.

The report cites an estimate that Canada hosts about 10 per cent of the world's top AI researchers. It contrasts that figure with venture funding and company location data. In 2024, Canada deployed $2 billion in venture capital to AI startups, which it estimates is less than 2 per cent of global AI venture capital investment.

Additionally, it points to increasing founder and company migration. In 2024, two-thirds of high-potential Canadian-led startups that raised more than $1 million were headquartered outside Canada, according to the report.

The report describes a venture ecosystem with capital available, but not at the scale the authors associate with Canada's share of research talent. It estimates $11.5 billion in "dry powder" across the Canadian venture ecosystem, noting that AI accounted for about 30 per cent of Canadian VC investment in 2024, up from 16 per cent in 2022.

Venture scientist

The "venture scientist" is defined as a frontier technical or scientific founder who translates research breakthroughs into venture-scale companies. It says such founders typically pair with execution and go-to-market leadership.

The report argues that the absence of coordinated pathways from research to company formation reduces Canada's startup output. It frames the issue as one of speed and alignment across talent, capital, compute resources, and early customer access.

The report set out the ambition of a fivefold increase, from about $2 billion to about $10 billion a year, to match Canada's global AI talent.

It also cites a survey of the Mila community that found nearly 95 per cent of respondents expressed interest in entrepreneurship. The report positions that interest as a pipeline for future founders if institutions and investors offer clearer routes to incorporation, early-stage funding, and market testing.

"Canada has proven it can lead in AI science. Now it needs the on-ramps that help researchers turn breakthroughs into companies that start and scale here, so we are not just a farm team but a place where enduring companies get built, before the window closes," said Stéphane Marceau, Managing Director, Mila Ventures.

Policy focus

The report points to the importance of computing infrastructure and immigration pathways for skilled workers, noting that Canada committed $2 billion to AI compute infrastructure in 2024. It also cites interest from US-based workers in Canadian programs, including an open work permit route for American H-1B visa holders, which reached capacity within two days of launch in 2023.

On an industry-ecosystem scale, the report compares Canada with large investments in the United States. Over 40 per cent of Canada's AI investment comes from the US. Additionally, it is projected that US AI hyperscalers will invest over $500 billion in 2026. 

Mila and Bain argue that Canada can respond with a pan-Canadian platform approach. They say efforts already underway remain fragmented and call for coordination among researchers, investors, corporations, policymakers, and academic institutions.

Marceau also set out practical needs for founders. "That means faster paths to founding, strong operator partners, and early access to capital, compute, and real-world testing. If we get it right, we keep talent and value in Canada," he said.

Mila is evaluating dedicated funding mechanisms connected to Mila AI Ventures for companies emerging from its ecosystem.