From Hype to Impact: Navigating AI Investment and Adoption in a Maturing Market

Key takeaways from an Invest Canada 26 panel on AI investment decisions

Zain Rizvi recently moderated a panel titled “AI Investment Decisions in Practice” at Invest Canada 26. The panel, which included Kory Jeffrey from Inovia Capital and Laura Moss from Cohere, focused on how investors (Inovia) and operators (Cohere) are evaluating AI companies in practice, particularly as the market moves from broad excitement around AI to a more disciplined focus on adoption and durability.

Here were the key takeaways:

• AI is moving from excitement to proof. The conversation is no longer only about testing use cases. Adoption has increased significantly, and companies are now finding practical ways to embed AI into their systems, workflows and products to realize tangible efficiencies and benefits.
• Business models and pricing are still evolving. Usage-based, subscription-based and outcome-based models all have a role depending on the use case, but there is growing interest in pricing that better aligns with customer value. This is important where companies are building on top of foundational models and do not fully control token costs.
• Vertical AI remains a meaningful opportunity for startups. Not every AI company needs to build a foundational model to build value. There is room for startups to build durable businesses by focusing deeply on specific verticals, workflows or customer problems. Horizontal AI models cannot solve every product need, and application-layer companies can still win where they bring focus, customer understanding and workflow integration.
• Understanding your customer is essential. Companies that know where they can add value, where real demand exists and how customers actually make adoption decisions are better positioned to convert AI interest into durable revenue. Cohere’s focus on enterprise customers was a helpful example of the importance of knowing where to compete and where to build around customer needs.
• Canada can win with greater investment in AI. Firms like Inovia and others are working to solve the capital gap by providing funding for AI companies to scale. Canada has historically been strong on invention but has struggled to commercialize. Greater investment and support for scaling is needed to change that pattern.