Procuring Sovereignty in the Cloud

There was a lot in the government’s artificial intelligence strategy published last week — support for open source, and AI literacy programming, and something about an “investment flywheel” for AI companies.

But an email from Craig McLellan helped cut through a lot of the noise. Craig is CEO of ThinkON, a Canadian cloud services company that is name-checked in the AI strategy.

“The only way a government can help us grow is to acquire our services,” McLellan wrote to Shield. “Giving out grants or signed MOUs are not helpful unless you are a quasi-monopoly and you need cheap capital. Purchase orders drive growth and efficiency, which in turn attracts smart capital.”

We hadn’t been specifically discussing the government’s AI strategy, at the time. We’d been talking about government procurement and sovereign cloud services.

But one way to think about the AI strategy is that the most meaningful bits of it are the promises of government procurement — both in terms of physical AI compute infrastructure, and government buying AI services from innovative companies.

On that point, Craig had some words of warning: “I believe the biggest issue stifling engagement is the overarching fear of failure. There is an adage within the public sector that it is always safer to do nothing than fail trying, so this ends up favouring multi-national incumbents.”

If all comes back to procurement, because government purchasing writ large represents 14 per cent of Canada’s total GDP, according to OECD data. That is a huge economic force. It’s equivalent to the total size of the Alberta economy.

CEOs and policy wonks can see that if we geared procurement towards driving economic outcomes, we could make huge progress. But it’s a maddening challenge, because government procurement is so often dysfunctional, sclerotic, and prone to political boondoggles.

But at the Canadian Shield Institute, we are not afraid!

In Chapter 6 of Foundations of Digital Sovereignty, we take the bull by the horns and present what a Canadian procurement strategy for sovereign cloud services might look like. If the government insists on insulating data and compute workloads from foreign access through instruments like the CLOUD Act and FISA, we can steer purchase orders towards authentically Canadian providers.

We dive into this in detail in Chapter 6.