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For decades, Silicon Valley has reigned as the tech innovation capital. From Google and Apple to Facebook, it’s birthed tech titans and lured ambitious entrepreneurs.
But with artificial intelligence taking center stage, things are changing. A new breed of start-ups have a wide range of countries and states to choose from, and sometimes birds of a feather will flock together — and perhaps away from the direct shadow of the leading tech giants.
That brings us to Toronto, which is already making an extra reputation for itself as a booming AI scene. Prominent figures like Geoffrey Hinton, an AI heavyweight previously at Google, have already arrived in town to make it a new home.
The Canadian government’s investment in AI research and development, combined with a welcoming immigration policy for skilled workers, creates an ideal environment for talent and innovation to thrive.
Established tech giants like Google and Uber have planted their AI flags in Toronto, further solidifying its position as a major tech hub.
This begs the question: is Toronto the new Silicon Valley?
We asked Willson Cross, co-founder and CEO of Borderless AI, an AI-powered startup in the Employer of Record (EOR) space.
Borderless helps accelerate the process of onboarding, managing, and paying international team members through its AI agent, Alberni.
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Toronto Lures AI Entrepreneurs with Government Backing
Q: With the Canadian government’s recent announcement of more financial incentives in the AI sector, do you think more Entrepreneurs will be looking towards Toronto rather than Silicon Valley?
A: Yes, there is a strong indication that more founders, entrepreneurs, and CEOs will be looking towards Toronto as a prime location to headquarter their AI companies and startups.
The Canadian government’s recent commitment of over $2 billion in funding for AI innovation has sent a powerful signal that the country is fully backing this transformative technology.
It’s a substantial financial investment that represents the government putting its money where its mouth is, demonstrating tangible support beyond just lip service.
Moreover, major venture capital firms, which have traditionally considered Silicon Valley the epicenter for tech investments, are now turning their attention to Toronto’s growing AI scene.
A prime example is the recent $450 million fundraising by Cohere, an AI company, which had the Canadian Pension Plan as the anchor investor.
Tech Giant Arrivals Boost Toronto’s AI Talent Pipeline
Q: Many tech giants like Google and Uber have established AI research labs in Toronto. How does their presence influence the city’s AI ecosystem and the growth of startups like Borderless AI?
A: The arrival of Google and Uber in Toronto creates both competition for talent as well as opportunity.
On the competition side, there will be more companies vying for the same pool of AI and tech talent in the city.
However, the bigger positive impact is that many employees will eventually leave companies like Google and Uber to join or start their own early-stage AI companies and startups.
This influx of experienced AI talent from tech giants will elicit more venture capitalist funding and foster more innovation in Toronto’s AI ecosystem.
Prioritizing Trust and Ethics in Toronto’s AI Growth
Q: With the rise of AI companies in Toronto, what steps is the city taking to ensure a sustainable and ethical development of AI technologies?
A: There will be a transitional period. As more AI startups emerge, companies will need to quickly establish trust and compliance with ethical AI practices.
The government has established guidelines for companies developing AI infrastructure, but similar to the early days of e-commerce, when consumers were hesitant to provide credit card information online, AI companies will need to prove they can be trusted.
Certain AI platforms will likely undergo a sorting-out period, during which time they will demonstrate robust ethics and gain user trust, while others that fail to prioritize these issues will fall behind.
Establishing a reputation for trustworthiness and adhering to best practices around AI ethics will be crucial for success.
Cost Savings While Testing Your Product in the Market
Q: Borderless AI claims to use AI to power its Employer of Record (EOR) services. How is AI an enabler in the industry, and what competitive advantage does Borderless AI have due to its location in Toronto?
A: We at Borderless AI are deploying AI in the global Employer of Record (EOR) and global payroll category, which is expected to grow to a $10 billion market opportunity by 2028. By bringing AI to this industry, we are enabling much greater adoption.
Many AI startups struggle to find viable business models because they are trying to create something new from scratch or doing AI just for the sake of AI, rather than solving real-world problems.
Being headquartered in Toronto provides us with about a 30% cost savings compared to operating in the U.S. We can build our product for around $0.70 on the dollar versus $1 in the U.S. This cost efficiency, combined with access to the AI talent and innovation happening in Toronto, gives us a significant competitive advantage in the EOR space.
Keys to Success for AI Startups
Q: What advice do you have for startups trying to infuse AI into their business model?
A: From my experience, startups need to prioritize the following to gain the most out of their AI investments:
- Put trust and safety at the forefront of your development efforts, and ensure that your product teams are compliant and follow best practices from day one.
- Move fast. You’re going to see so much competition from other companies that are pivoting into your space, because if you do something that works, people are going to follow you. There’s going to be bigger companies wanting to do what you’re doing. There’s going to be younger, nimbler, earlier companies doing what you want to do. So I’d say move fast and try and get as much of that head start as you can.
- Make sure you’re building AI for a true use case in the world, not just because it looks fancier or looks cool, or you like using it, but make sure you really talk to your customers. Talk to your users and know the actual use case and the pain points of your customer base before you invest in building an AI system.
Toronto’s Future as the AI Hub of the World
Q: Looking ahead, what role do you envision Toronto playing in the global AI landscape, and what specific areas or applications of AI do you think the city might specialize in or lead?
A: I think in five years, people are going to look at Toronto and go, Wow, that’s the AI hub, that’s where all these AI companies are coming from.
It’s going to be a compounding effect — you’ll have these new companies going public, and then you’re going to have large exit events for executives of those companies who will go start other companies. That’s going to be Toronto’s mark on the global AI landscape.
Just like Los Angeles is known for Hollywood and the film industry and New York is known for finance and banking, I envision Toronto becoming renowned as the “AI hub” of the world in five years.
While I can’t point at particular areas of AI specialization, Toronto’s strength is the proliferation of AI companies and startups capitalizing on the existing ecosystem and talent pool there.
