A new study released by the IBM Institute for Business Value suggests that many Canadian organizations are expanding their use of Artificial Intelligence (AI) faster than they can govern it effectively, raising concerns about accountability, operational control, and digital sovereignty.
The global research, conducted in partnership with the Dubai Future Foundation, surveyed more than 1,000 senior executives across 20 countries and 21 industries, including Canada. The report examines how organizations manage AI systems as they move beyond experimentation and become integrated into essential operations.
According to the study, governance challenges are already affecting Canadian businesses. Nearly two-thirds of Canadian executives surveyed said gaps in AI oversight are making it more difficult to deploy the technology at scale. The report also estimates that AI-related irregularities, including errors, bias, duplicated efforts, and uncoordinated implementation, cost large Canadian enterprises approximately $144 million annually.
Losses linked to governance
Researchers found that roughly half of those losses are linked to governance shortcomings rather than failures in the AI technology itself.
Manav Gupta, Vice-President and Chief Technology Officer at IBM Canada, said organizations are struggling to maintain visibility into increasingly complex AI systems.
“AI systems now act as critical infrastructure, and that raises real questions about trust, accountability, and sovereignty for Canadian businesses, governments, and institutions,” Gupta said in a statement. “Governance is what makes digital sovereignty real and enforceable.”
The report arrives as discussions around artificial intelligence and digital sovereignty continue to grow in Canada, particularly as AI tools become more common in public services, financial institutions, transportation systems, and healthcare environments.
The study argues that digital sovereignty should not be viewed solely through the lens of data location or national borders. Instead, it highlights operational control as a central issue, including the ability to monitor AI systems, understand how decisions are generated, manage access, and intervene when problems occur.
“Digital sovereignty is about control, not isolation,” Gupta said. “Organizations need governance they can enforce and demonstrate, not just policies on paper.”
The research also examined what it describes as “orchestration-led governance,” a coordinated approach that manages AI systems throughout their full operational lifecycle. Organizations using that model reported stronger productivity gains, improved returns on AI investments, and fewer AI-related errors and losses.
Despite those reported benefits, only 18% of Canadian organizations surveyed said they currently have systems in place to coordinate and govern AI across everyday operations.
To address those challenges, IBM recently introduced IBM Sovereign Core, a software platform designed to help organizations create and manage AI-ready sovereign environments while maintaining operational oversight.
The complete report, titled AI in Motion: Orchestrating AI at Scale for Sovereignty and Resilience, is available through the IBM Institute for Business Value website.
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