By Keith Halliday
“The Discombobulator. I’m not allowed to talk about it,” President Donald Trump told the New York Post after the January U.S. raid on Venezuela.
According to the President, who continued talking about it, the secret American weapon made Venezuelan “equipment not work” as US choppers vectored in on President Maduro’s not-so-undisclosed location.
We don’t know what The Discombobulator is; perhaps a cyber or sonic weapon, or some other cutting-edge technology unlikely to be on the shelf at CFB Petawawa. But its mysterious capability provides a useful warning for Canada to get thinking about the neighbourhood hegemon in the age of AI.
Back during World War Two, economic warfare focused on goods. The first thing the Royal Navy did when war broke out with Germany was cut off trade in wheat, oil and tungsten. After 9/11, virtual sanctions came to the fore. The US and its then-allies built elaborate bureaucratic and technological structures to cut off banking, financial and technology flows for adversary nations and their elites.
Even if not the magic wand sometimes portrayed, this kind of economic warfare imposes real costs on the other side. However, every time you tighten your grip on a choke point the receiving party pushes to find workarounds. The Nazis built synthetic oil plants. Adversaries today use crypto, offshore banking and other schemes to keep their money moving. Other powers are steadily building international payments platforms that avoid the U.S. dollar.
This is yet another reason why the emergence of AI, and American domination of it, is such welcome news for the folks who spend time in the Situation Room in Washington. Not only does the AI complex create gobsmacking amounts of wealth (NVIDIA’s market cap alone rivals that of the entire Canadian stock market), it also creates new choke points to leverage against adversaries and friends alike.
Want access to cutting edge chips for your national AI strategy, as the United Arab Emirates did in 2025? Then you’ll need to make a deal with Washington. Want to do something Washington doesn’t like? Now, in addition to checking your tungsten supply lines and what currency your trade is denominated in, countries must closely examine their tech stacks for new vulnerabilities. They will find plenty.
Consider Kimberley Prost, a Canadian judge on the International Court of Justice who was sanctioned by the U.S. last summer. According to the Canadian Press, she was quickly cut off by American Express and Amazon Canada. Books disappeared from her e-reader. Even her Alexa virtual assistant stopped talking to her. She can’t make hotel reservations with a credit card or use public transit systems that don’t take cash.
U.S. domination over data and platforms grants it an excessively long reach. In June 2025, Microsoft executives admitted under oath to the French Senate they could not guarantee that European data would not be surrendered to the US under the US Cloud Act - even without French approval.
National security advisors will need to ask a series of questions along two dimensions: the nature of the national AI tech stack and how sovereign each layer is (or can be) starting from physical hardware through data centres and cloud providers all the way to AI models and the sensitivity of the data and applications - from cat videos through air traffic control to ‘Canadian Eyes Only’ defense plans.
As a thought exercise, let’s assume the US is seeking to escalate pressure on Canada in some future 51st-state incident. Consider three random examples of use cases.
At one end of the sensitivity spectrum, those AI-enhanced cat videos you uploaded to Facebook are in some Meta cloud somewhere. Possibly even on servers physically in Canada, but in a system where the data and algorithms are fully controlled by the US-domiciled platform owner. If Washington wanted to, they could kidnap your cat videos as easily as a South American president.
But - with apologies to your cute cat - who cares?
On the other end of the sensitivity spectrum, however, are “Canadian Eyes Only” documents, which already sit, I hope, on proprietary federal servers with no US entanglements. They will keep working, unless the Discombobulator is employed to physically shut them down.
In the middle are choke points aplenty.
You might have a fancy new AI-enabled Model Predictive Control application making your oil refinery more efficient, but where does it reside and who has the ability to shut down your refinery by turning it off?
Your small business and the NGO you’re on the board of might both use G-suite for word processing, data and email with some AI tools layered on top. You could easily end up in Judge Prost’s situation.
Your health data with AI-enabled diagnostics might be on a server located in Canada with Canadian legal entities holding the encryption keys, but when Washington calls the cloud company with an offer they can’t refuse, your doctors may find themselves staring at a new kind of “blue screen of death.”
You might be enjoying a fast commute in Kirkland, Quebec courtesy of its new AI-powered traffic light system. What will the AI companies behind that say if American authorities give them a choice between cutting off Kirkland or being excluded from US market opportunities?
We are so integrated with the US tech stack it is hard to even conceptualize de-risking this situation. Revive WordPerfect and the Blackberry? Adopt Tchap, the new French sovereign messaging app? Get Canada Post to create C-mail, C-sheets, and C-pres? Only allow hospitals and municipal traffic light systems to use cloud providers with no assets in the U.S.? The trade offs are painful, not least because many American AI and digital platforms are highly innovative and useful. That’s why we’ve embraced them.
The answer lies in some thoughtful balancing act to de-risk as much as possible where the cost and capabilities of Canadian options are feasible.
Exactly where that point is and how it moves over time makes for a difficult calculation.
The impending CUSMA renegotiation further complicates the situation. The Americans will try to use their massive economic leverage to impose some kind of Digital Donroe Doctrine on us, preventing Canada from too much sovereign digital de-coupling. It’s partly about the money, such as digital services taxes and Canadian content obligations. It’s partly about ensuring as much of the world as possible is locked into the US tech eco-system instead of China’s or some European third way. And it’s also partly about maintaining and creating new leverage points over Canada in the future.
Our trade negotiators will have to learn new tricks in this largely unexplored AI sovereignty space. In the long run, this will prove far more important to Canada’s independence and economic success than even the most important of the physical goods industries.
This will require assessing the possible use cases and the spectrum of AI sovereignty needed to de-risk them. It will also require assessing how much near-term pain we can absorb if the Americans escalate.
AI and digital sovereignty will not be cheap, easy or convenient. Many Canadian businesses will hold out hope that U.S. threats turn out to be wild talk. Maybe. But the stakes are high and governments - businesses too - need to manage risk not hope for the best.
Former Prime Minister Stephen Harper recently said that Canada needs to avoid becoming a captive resource colony of the Americans. True enough - and we must also avoid becoming an AI colony if we intend to steer clear of 21st century-style discombobulation.
Keith Halliday writes the Yukonomist column for the Yukon News and is a winner of the Canadian Community Newspaper Award for Outstanding Columnist. The audiobook version of his most recent book Moonshadows, a Yukon-noir thriller, has just been released.