This submarine contract is not simply a defense procurement. It was a deliberate and meticulous structural shift to ensure future competitiveness, and it shows that Carney is betting on the EU and Germany for the vision he has for Canada’s future. Carney seems to have a very 20th century view on the “middle power” coalition that he thinks he’s leading. One that is powered by fossil fuel and resource security, fiscal capability, and spending. What he underestimates is the AI supply chain, which Canada is increasingly being excluded from. It underestimates the role Korea will play in this new age of the “AI dollar”.
Korea is bound to become a leader in physical AI. Basically all of Canada’s “nation-building” manufacturing megaprojects that Carney announced over the past year will need Korea’s help in one way or another, and I bet there are more than a handful of high profile individuals in the Korean government that definitely feel let down after this, given the genunine effort Korea has put in to show that Canada and Korea can work together. Politicians are people at the end of the day and there are human discussions and feelings behind the scenes.
For example, Korea now won’t be afraid to go head on against Canada in any bid or market as a competitor. The US is looking to Korean manufacturing and physical AI data to maintain its hegemony and Korea won’t be afraid to help even if it becomes a security threat to Canadian sovereignty or makes Canadian manufacturing less competitive. Additionally, Canada’s auto sector is about to become “Australianized” (aka wiped due to US reshoring policies and the weakening competitiveness of Japanese and German vehicles), while Hyundai/Kia is arguably becoming the only competitively priced alternative to Tesla and Chinese EVs being pumped out in droves.
What the Canadian media never mentions in Carney’s “dream” project with data centers and sovereign AI is that you’ll be paying tens of, if not hundreds of billions of dollars to Korea for its AI chips. There could have been a deal to mitigate the inflationary costs. I really do like Carney’s vision for “middle powers” but that coalition Canada wishes to lead will be weak if Korea completely integrates itself with the US AI supply chain.
It’s not like the EU is catching up to Korean memory chips any time soon: Korea just announced 3.3 trillion dollars worth of investment last week to widen the lead in physical AI and memory chips. Meaning Canada will undoubtedly pay royalties to buy quality Korean robotic data in the near future to fuel its manufacturing dream given that Korean data comes from its manufacturing sector that focuses on high quality, high-margin products.
LNG? Just last month Canada signed a 2.3 billion CAD deal with Hanwha for its FLNG plants. The LNG that Canada wants to ship out from Northern BC will need more LNG tankers, of which Canada will buy from Korea.
Meanwhile, EU’s technological competitiveness is declining by the week and that’s what Canada has chosen.
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