Oct 31, 2025

Leaders at HardTech Summit optimistic about Canadian mergers but want more support for scaleups. At VentureLab ’s HardTech Summit this week, the spotlight was on how to build Canada’s semiconductor sector amid rising pressure from the United States (US) and shifting geopolitical conditions. These conversations come in the wake of multiple promising Canadian artificial intelligence (AI) chip startups either moving south or getting snapped up by larger American players, including CentML , Hyperlume , Tenstorrent , and Untether AI . “It’s validation by the market that what we’re building is worth a lot, people want it, and they’re willing to pay for it.” Niraj Mathur, Blumind Canadian semiconductor leaders BetaKit spoke with at the summit said this recent activity is positive, and believed that a successful ecosystem features both independent domestic startups and big foreign players with deep Canadian operations. However, they also argued that Canada should do more to support its own chip companies, particularly at later stages, to ensure that the full economic benefits of local innovation, talent, and intellectual property don’t flow south. Toronto-based AI chipmaker Untether recently filed for bankruptcy following an acquihire by US semiconductor firm Advanced Micro Devices (AMD). Ottawa peer Hyperlume also recently sold to US-based Credo mere months after raising a $12.5-million USD seed round to commercialize its tech for AI data centres. Toronto’s CentML, which helps businesses maximize their existing hardware, was acquired by US AI chip giant Nvidia in a deal that could reportedly top $400 million USD. This flurry of Canadian AI chip mergers and acquisitions follows Toronto AI semiconductor developer Tenstorrent’s relocation to the US last year to help it raise more money from American investors and prepare for an eventual public listing. The company closed a nearly $700-million USD Series D at a $2.6-billion valuation shortly afterward. Niraj Mathur, co-founder and CEO of Ottawa AI chip developer Blumind , argued to BetaKit that this recent activity sends a “very positive” signal about growing recognition concerning the importance of semiconductors to the AI stack and the level of Canadian innovation in the space, adding that this has led to increased investment in startups like his own. “It’s validation by the market that what we’re building is worth a lot, people want it, and they’re willing to pay for it,” Mathur said. Kevin Conley, CEO of Kitchener-Waterloo semiconductor startup Applied Brain Research, told BetaKit he is “not worried” about these deals. He said the US views Canada “as a treasure trove of AI talent.” The Silicon Valley-based executive, who has spent his career working in the chip industry and previously held leadership positions at SanDisk, said that it is “really hard” for small semiconductor companies to grow into bigger players. He noted that large chip firms typically grow through mergers and acquisitions. “It’s a really tough business to scale, so you have to have deep pockets, or you have to have an incredible ability to attract customer revenue,” Conley said. Building hard tech startups in Canada comes with some advantages and disadvantages. Conley noted that Canada has “a lot of support” that does not exist in the US, such as government incentives and research programs. Hamid Arabzadeh, chair and CEO of Ottawa chipmaker Ranovus , nonetheless noted on stage that the country is lacking when it comes to later-stage risk capital for hard tech scaleups. His assertion appears to be echoed in data from the Canadian Venture Capital & Private Equity Association (CVCA). Mathur argued that Canada is great at supporting early-stage startups but does a poor job of helping scaleups that typically require bigger bets—more capital and greater risk—to succeed independently. “That’s when our risk-averse nature kicks in,” he said. “Support for those kinds of companies is limited in Canada, and that’s exactly why they become prime acquisition targets.” Even so, Mathur anticipates that US acquirers that maintain operations here will produce more spinoffs down the road. “Support for those kinds of companies is limited in Canada, and that’s exactly why they become prime acquisition targets.” Hyperlume co-founder and former CEO Mohsen Asad predicts that this will hold true over the long run for his company, which he believes will be able to accelerate its vision under the Credo umbrella. Asad, who is now Credo’s senior director of core technologies, told BetaKit that Hyperlume’s Canadian team has remained intact in Canada, and said the company is scaling its presence in the country. Asad argued that deals like this keep and create more cutting-edge tech jobs in Canada, ensuring greater support and nourishing more domestic entrepreneurship over time—something he acknowledged the industry could also use. “It’s not just a single recipe … sometimes it makes sense to go path number one, sometimes path number two,” Asad said. Toronto Global vice-president of investment attraction Daniel Hengeveld also thinks there is a role for foreign direct investment to play in building up Canada’s chip industry. “There is a way to open the door to foreign corporations coming in, investing, and doing great things here,” Hengeveld said on stage. “If we keep that door closed … then we automatically rule ourselves out from being able to compete in the space.” Fellow panellist Chris Smith, corporate vice-president at AMD and head of the firm’s Toronto Markham Design Centre, said Canada’s need to invest in domestic companies and infrastructure should not preclude the country from taking advantage of companies like AMD that are interested in building a strong presence here. AMD has done just that since acquiring Greater Toronto Area (GTA)-based graphics chip developer ATI Technologies in 2006. Smith said AMD now has over 3,000 engineers in the GTA, which marks one of the US semiconductor giant’s largest global research and development centres. The HardTech Summit Expo Hall. As to what Canada could do to grow its semiconductor ecosystem beyond simply supporting more scaleups, Hengeveld argued that the country must pick its lanes since it does not have the capacity to invest in everything across the board. Instead, he wanted the country to focus on strengths like talent. While Smith believed that some entrepreneurs want to move to the US because it is easier to raise money there, he felt Canada remains the place to be for talent and research. He wanted pathways to attract that talent. “As Canadians, we have this humble tendency, which I think, in general, is a great thing. However, we’re talking about a global war for talent and for innovation, and I think in that capacity, we have to be bold,” Smith said. Arabzadeh said on stage that he thinks Canada needs to incentivize local industry leaders with deep experience to leave multinational chip firms and build new companies. He suggested that the government could help by eliminating the capital gains tax for semiconductor companies’ windfalls. He shared this recommendation with the feds, telling them they would not lose any money given the current activity in the space. “We need to think out of the box,” Arabzadeh said. “We have such a small community.” All images courtesy VentureLab