Monday Market Minute | May 15, 2023

AI investment frenzy builds as Nvidia earnings loom and Canadian startups position

What Moved

The AI narrative dominated markets in May as anticipation built ahead of Nvidia's quarterly earnings. ChatGPT had surpassed 100 million users faster than any application in history, and the downstream investment implications were reshaping venture capital. Canadian AI ecosystem — anchored by the Vector Institute, Mila, and a deep academic bench in Montreal, Toronto, and Edmonton — attracted renewed international investor interest. Several Canadian AI startups raised notable rounds despite the broader VC downturn.

Why It Matters

AI represented a rare bright spot in an otherwise muted venture landscape. For Canadian private markets investors, the question was how to access the theme without overpaying. Public market AI valuations had already become stretched, making private market exposure potentially more attractive for disciplined allocators. The Canadian advantage was real: world-class AI talent, lower costs than the Bay Area, and a regulatory environment that was more accommodating than the EU's emerging AI Act framework.

Signal to Watch

Whether Canadian AI deals could maintain reasonable valuations or whether the global frenzy would import Silicon Valley pricing into a market that had historically offered a discount.

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