Good morning. Turbopuffer is a little-known Ottawa startup, unless you’re a major AI firm in need of its services – a group that now includes Claude’s Anthropic. The three-year-old company is already on track to bring in $100-million in revenue, though its co-founder was at first reluctant to talk about it. But first:
Up first
In the news
Energy: Alberta will propose a southern route for its new oil pipeline to the West Coast, government and industry sources say.
Infrastructure: Prime Minister Mark Carney and B.C. Premier David Eby announced a multibillion-dollar deal on major projects.
Real estate: Condo builders have been offering big discounts in exchange for signing NDAs.
Open this photo in gallery:
Turbopuffer co-founders Justine Li and Simon Eskildsen.Photo illustration by Yannis Davy Guibinga/The Globe and Mail
In focus
The fast-growing AI startup you’ve never heard of
Hi, I’m Joe Castaldo, and I write about artificial intelligence for Report on Business.
Since I’ve been writing about tech and AI, I’ve found that most startups are thirsty for media coverage, almost aggressively so. Turbopuffer is an exception.
When I first heard about the company last year, I wasn’t totally sure what it did. Its website was laden with highly technical jargon – not marketing jargon, which is the norm. But its list of customers caught my eye, one in particular: Anthropic.
How, I wondered, did this little-known Ottawa startup with a few dozen employees snag one of the biggest and most important AI companies in the world as a customer?
Co-founder Simon Eskildsen, 31, had the answer, but he wasn’t so easy to pin down. He seemed much happier focusing on the company than talking to a journalist about it. When we finally arranged a video call in January, he was friendly and engaging, and seemed like someone with a keen sense of autobiography. He enthusiastically shared his story of leaving his native Denmark at 18, working for Shopify in Ottawa and starting Turbopuffer in 2023 with Justine Li, whom he met at the e-commerce giant.
Turbopuffer, he explained, had devised a new, less expensive way for AI systems to search for information when serving up answers. Fast, efficient search is crucial for AI chatbots and applications to be useful, ensuring they have relevant context to answer your questions, retrieve the right documents, help with a coding project, or whatever else AI is doing these days. That explained why Anthropic would be interested, at least.
Open this photo in gallery:
Eskildsen and Li met at Shopify, where the pair spent years working on the most difficult and crucial parts of the company’s infrastructure.Photo illustration by Yannis Davy Guibinga/The Globe and Mail
Still, Eskildsen wasn’t sure an article was worth it (hard-core engineers are his target demographic, not Globe and Mail readers) but said he would give it some thought. My Ottawa-based colleague, Sean Silcoff, later met with him to hear more, and see if Eskildsen could be persuaded. Finally, in the spring, he said he was game.
One of his reasons for opening up should tell you a lot about him: He wanted to highlight the International Olympiad in Informatics, an elite annual programming competition that he participated in as a teenager. He wanted more people to know about it, and for Canada to invest more in international math and science competitions for young people. “That would be very, very good for the GDP of the world,” he said.
The reticence to engage with the media isn’t the only unusual thing about Turbopuffer, as I learned through my reporting. The company is less than three years old, profitable and on track to bring in more than US$100-million in revenue this year. It has needed to raise less than US$1-million in outside funding when other startups boast about raising tens or hundreds of millions of dollars. And it’s not in Silicon Valley.
Canada is constantly wracked with anxiety over the state of the tech sector, and how we’re losing ground in AI and exporting talent. Turbopuffer, which is providing a key piece of AI infrastructure for major players, is proof that the picture isn’t always so bleak. It just hasn’t been bragging about it. What’s more Canadian than that?
Charted
Following the money
Federal public administration saw the sharpest yearly decline in real GDP in about three decades this April, Statistics Canada says. Meanwhile, federal defence was way up – reflecting a shift in spending by the Carney government.
Quoted
We were squeezing every bit of juice we could out of the battery.
— Stephen Hill, owner of a Tesla Model Y and a 28-foot Airstream
Worried about limited range in an electric vehicle? Meet the drivers using EVs to haul Airstreams and boats across the continent.
Up next
More files we’re following
Defence: Canada plans to announce around 10 founding nations for a global defence bank at next week’s NATO summit in Turkey.
Tech: You’re likely to see lots of “AI enablement” positions on job boards, as companies try to figure out if they’re spending piles of cash on AI without getting much in return.
Real estate: Some developers are offering buyers of new condos steep discounts, provided they sign confidentiality clauses, as the sector continues to struggle with sluggish sales and mounting inventory.
Coming up today: U.S. markets are closed for Independence Day. We’re watching services purchasing managers’ indexes for the Eurozone as well as Japan and China.
Morning update
Global markets were mixed as investors pushed back expectations for an imminent U.S. interest rate hike after yesterday’s weaker than expected jobs report.
TSX futures pointed higher, while U.S. stock markets were closed for the Independence Day holiday.
Overseas, the pan-European STOXX 600 was up 0.17 per cent in morning trading. Britain’s FTSE 100 fell 0.29 per cent, Germany’s DAX rose 0.25 per cent and France’s CAC 40 gave back 0.05 per cent.
In Asia, Japan’s Nikkei closed 1.47 per cent higher, while Hong Kong’s Hang Seng rose 1.28 per cent.
The Canadian dollar traded at 70.51 U.S. cents.