In 2025, some of Canada’s most influential tech leaders leaned hard into an AI-first ideology.
BetaKit is ending the year with a look back at the biggest tech stories of 2025. With more to come throughout December, you can read the full series here.
In 2025, AI was a gravity well, churning in the centre of tech, sucking in nearly every Canadian startup.
Let’s start with venture capital, the fuel for most startup rocketships, which has been almost fully consumed by artificial intelligence. AI startups captured nearly 50 percent of all VC dollars invested globally in 2025.
In Canada, it was already a tough fundraising year, but if you were not an AI startup, the landscape was bleak. CVCA data shows AI drove Canadian investment like never before in 2025, as mega deals from AI firms like Cohere, Blue J, and Moonvalley scooped up a hefty chunk of Canada’s investment dollars.
Money talks in tech, but so do founders. And this year, some of Canada’s most influential tech leaders leaned hard into an AI-first ideology.
The market froth was so strong that some Canadian investors ripped up their old playbooks as generative AI “radically changed” the investment math. Others committed capital to seemingly any startup with an AI hook: AI for sales coaching, AI for vets, AI for floor plans, AI for blue-collar time sheets. Some of these AI-first companies began to generate millions of dollars in revenue in a few short months.
But Canadian tech’s massive reorientation towards AI was about more than balance sheets. Money talks in tech, but so do founders. And this year, some of Canada’s most influential tech leaders leaned hard into an AI-first ideology.
Take Shopify’s Tobi Lütke, who in March penned an explosive memo signalling a new era at the company. Lütke decreed that “reflexive” AI use was expected at the company and said employees who don’t embrace it (including himself) could be left behind. Shopify teams would also now be required to justify new headcount over opting for AI tools.
As Lütke’s vision rippled throughout Silicon Valley, Canadian companies across sectors were speeding straight into the AI vortex. OpenText, Clio, Klue, and Fellow AI are just a few of the Canadian tech companies BetaKit covered this year that have dramatically reoriented themselves towards AI in some way: scrapping old business models, launching new products and features, making major acquisitions, and slashing headcounts.
“No neutral ground”
A dizzying proportion of the global innovation economy is now tightly tied to AI. But it’s tough to untangle the boosterism and hype from the tech’s real value.
Canadian AI companies like Cohere and Waabi have seen incredible success in securing massive investments at huge valuations. Globally, leading AI firms like OpenAI and Anthropic have become some of the most valuable private companies of all time, while chip giant Nvidia now accounts for approximately 7 percent of the total value of the S&P 500.
But the financial connections between many of the largest generative AI players appear to be a tangled, circular web that some critics argue is hiding overblown valuations based on slim evidence of return on investment.
Although AI can be an incredibly powerful tool, its long-term potential to generate ROI or meaningfully transform work hasn’t yet been proven. At Web Summit Vancouver, Cohere co-founder Ivan Zhang warned that firms are already struggling to demonstrate ROI from AI spending and have reached peak proof-of-concept fatigue.
#CDNTECH 2025
BetaKit looks back at the defining Canadian tech stories of 2025.
Meanwhile, AI skeptics claim a market crash to rival the dot-com bubble is just over the horizon, as capital and attention surge into AI well before profits have been demonstrated. OpenAI might be the most valuable private company of all time, but it might not turn a profit until 2030, and could require another $207 billion in funding to get there.
The skeptics might be right, but the investors throwing their money behind the technology believe the demand is very real and AI’s growth is structural, not speculative.
And if the skeptics are wrong, AI will fundamentally transform the economy, leaving any company too slow to adapt firmly in the dust. As CIBC cautions, there’s “no neutral ground” when it comes to AI.
If a gravity well is strong enough, objects caught in its pull are eventually crushed. Artificial intelligence firms that have been gobbling up investor money at an exponential rate will soon have to start showing receipts. If they do, the results could be transformative.
Until then, we’re left with a lot of questions. Exactly how will AI unlock productivity gains? Will employees be replaced by AI, or will they adopt the technology as a niche tool useful in specific circumstances? Will the capital commitments end before the ROI comes in?
But as 2025 has shown, these questions will not stop the gravitational pull of the AI vortex. Whatever happens next, it is pulling us towards the future.
Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
Feature image courtesy Madison McLauchlan for BetaKit.
