To gauge whether democracies are "winning" in the AI era, one can use a three-part framework. It assesses leadership in core invention (e.g., chips), effective adoption across the economy and national security, and the successful integration of AI in ways that reinforce, rather than undermine, democratic values.

Canada's AI strategy document mentions "indigenous" more than "GPUs." This focus on ideological alignment over the core technology required for AI development signals a disconnect from reality and may explain the country's lagging economic performance.

The primary competitive arena for AI is no longer just about creating the best algorithm. It has evolved into a geopolitical contest for control over the entire technology stack, including the infrastructure, supply chains, standards, and energy systems required to deploy AI models at a national scale.

AI is more than a tool for modernizing government services. It's a disruptive force that changes society's needs, compelling government to ask if its existing programs are even the right ones. For instance, is unemployment insurance the correct response to permanent, AI-driven job displacement?

Learning from its failed comprehensive AI bill, the Canadian government is adopting a step-by-step strategy. It's first addressing overdue updates to privacy laws and online harms like deepfakes. This pragmatic approach builds a solid legal foundation before attempting another ambitious, all-encompassing AI bill, making progress more politically viable.

For a country like Canada, deeply integrated with the U.S., full AI independence is unrealistic. Instead, sovereignty is about mitigating vulnerabilities across the tech stack to avoid coercion. This means ensuring the nation has strategic options and is not beholden to a single foreign power or corporation for critical technology.

The pursuit of 'Sovereign AI' transforms AI infrastructure into a strategic national asset. Governments are increasingly intervening to decide where AI infrastructure is built, how it's financed, and which countries get access, mirroring national policies for critical resources like energy and transportation.

Canada aims to build its AI industry not by creating another OpenAI, but by supporting companies that excel in specific, critical components of the AI value chain. This strategy focuses on becoming indispensable in areas like inference hardware, vector databases, or specialized models, rather than competing directly at the frontier.

The scale of the AI revolution, seen by some analysts as bigger than the internet, is creating existential fear among governments. They worry that foundational AI models will become society-level institutions they don't control. This fear, more than just economic competition, is driving the global push for sovereign AI initiatives.