On Friday, Anthropic shut off Fable 5, the most powerful AI model it had ever made public, just three days after it launched. The U.S. government had ordered the company to pull it, and left it no way to refuse.
The order came from the Commerce Department, and it barred access to the model by “any foreign national, whether inside or outside the United States.” Anthropic couldn’t separate its Canadian and European users from its American ones quickly enough to comply, so it took Fable down for every customer in every country.
The same order swept in Mythos 5, the version of the model with some of its guardrails removed, which Anthropic had kept to a small group of vetted partners.
Washington said the model had been jailbroken, meaning someone had found a way around the safety limits built to stop it from helping with things like cyberattacks. Anthropic said the flaw was minor and that rival models carry the same one.
But the fuller account is messier than a single flaw.
One warning that fed into the order came from Amazon, which is Anthropic’s largest investor and runs the cloud division that hosts its models, when chief executive Andy Jassy took his concerns to the U.S. Treasury secretary.
The White House has also said it moved after the model reached a foreign entity tied to the Chinese government, a claim a source close to the company disputes.
What matters for anyone downstream is the speed, because there was no new law and no court fight, only a letter on a Friday afternoon that took the model offline within hours, and an action that can easily happen again.
This should worry the Canadian provinces that are spending to attract hyperscalers, the American giants like Amazon, Microsoft and Google that build the data centres AI runs on, because it changes what those provinces are buying.
A data centre built on Canadian soil doesn’t change who controls the software running inside it. When the operator is American, it answers to Washington. Under the U.S. Cloud Act, that company can be compelled to hand over data regardless of where its servers sit.
Friday’s order showed the same jurisdiction can reach further, to the model itself.
“When access depends on someone else’s definition of national security, sovereignty becomes hostage to someone else’s priorities,” said Rupak Chattopadhyay, President and CEO of the Forum of Federations in Ottawa.
The fear this raises isn’t new to Canadians, who have spent the past year having the same argument about the F-35. The worry there has run for years, that the United States could withhold the software updates the jets depend on and leave allied fleets grounded. What used to be a hypothetical about fighter jets now has a working example in software, and software is far easier to switch off than a fighter program.
What the provinces are selling
No province has made the case for hosting these data centres more plainly than Alberta.
At the Global Energy Show in Calgary last week, Alberta’s minister of technology and innovation, Nate Glubish, explained the economic logic behind the push. Alberta takes natural gas out of the ground and turns it into electricity, turns that electricity into computing power, and turns the computing power into AI products it can sell to the world down a fibre line. He called the result a digital refinery and a digital pipeline, and he was blunt about why the pipeline word fits.
“When the rest of Canada may stand in the way of building pipelines to get our natural gas to global markets, they won’t stand in the way of fibre connectivity,” Glubish said.
The deals are close. Glubish said gigawatt-scale campuses are coming to Alberta later this summer, “shovels in the ground, permits complete, financing in place,” with the first running inside 12 to 18 months. Saskatchewan is making a version of the same bet, with a 300-megawatt facility going up south of Regina, room for close to a gigawatt more, and nuclear power behind it.
Glubish was also clear that hyperscalers aren’t the real goal.
The hyperscalers, he said, are “just the domino to get the trend going,” and the bigger goal is sovereign compute, infrastructure owned and run by Canadians, so that their data and code are “not subject to the United States Cloud Act.”
By his own account, the buildings are a means to that larger goal.
The investment question
For anyone financing these projects, Friday’s order introduced a risk that wasn’t there a week ago.
Graeme Harrison runs Augur VC, a Calgary fund that invests in AI infrastructure, and his company Simply Silicon operates data centres that run finished AI models for customers.
He wrote that Friday’s order puts “a chill on GW-scale training data centres outside the U.S.” Those are the largest sites, the ones built to create new models.
Capital won’t fund a build that big, he argued, if the model it produces can be barred from use the moment Washington decides it’s too powerful.
He took the point straight to Alberta’s bet.
“Places like Alberta banking on GW-scale demand to pull new natural gas resource development will be disappointed and face headwinds,” Harrison wrote.
Ottawa is paying to build data centres and computing power that Canada controls, but it’s doing so at a fraction of the investment levels in the U.S. Canada’s national AI strategy, launched this month, commits more than $3.5 billion across the field, including a $1 billion fund to help Canadian companies buy computing power instead of renting it from American giants. By comparison, the four largest American firms plan to spend a combined US$725 billion on infrastructure this year.
A risk Canada can’t legislate away
Canada has watched capital leave before. Through the last decade, pipeline cancellations and regulatory uncertainty were blamed for driving investment out of the oil and gas sector, where spending fell by more than half over the period.
Energy East was scrapped, Northern Gateway was cancelled, and foreign producers wrote down their oilsands holdings and moved the money elsewhere. Those were decisions made here, and ones Canada could in theory have made differently.
The risk Friday’s order exposes sits outside Canadian reach entirely.
A province can offer the cheapest power and the fastest permits and still not promise that the AI its data centres are built to serve will keep running, since that call belongs to a foreign government. For an investor weighing a Canadian site against one in the United States or the Gulf, that is a new line in the risk column.
Canada spent a decade learning how its own policy could frighten off capital, and this time the policy isn’t its own.
Final shots
- The race to host AI has been sold as an energy story, a question of which province has the cheapest power and the fastest permits.
- Friday showed it is also a sovereignty story, where the country that controls the model holds a switch no host can override.
- For Canada, the choice is between renting access to AI it does not control and paying to build capacity it does.