“There has never been such a thing as a low power using prosperous society,” said Tobi Lütke.
The Shopify CEO made the comment while sitting next to venture investor Chamath Palihapitiya at Toronto Tech Week 2025. They argued that the next era of global business will belong to countries and companies that control energy, infrastructure, technology, and capital. Those that move slowly will be left behind.
The conversation took place at Evergreen Brick Works in Toronto during Homecoming, one of the main days of Toronto Tech Week.
Hundreds attended in person, with more than 20,000 people watching online.
Moderated by Satish Kanwar, this session closed out the day’s programming. And while the event was promoted as a fireside chat, the conversation quickly expanded into a discussion about whether Canada is ready to lead or fall behind as global competition shifts.
Over the course of an hour, Lütke and Palihapitiya challenged Canada’s tech community to think beyond building apps or using AI tools. They said Canada has plenty of natural resources, talent, and expertise. But they argued that it lacks private capital leadership, bold ambition, and clear policies to turn these strengths into lasting global success.
Without major changes, they warned, Canada risks losing ground in a world where controlling infrastructure will decide who prospers for decades to come.
Why control matters inside companies too
After raising concerns about Canada’s national competitiveness, both men argued that a similar problem exists at the company level. Just as countries lose control when they rely on foreign capital or imported infrastructure, companies give up control when they build themselves around vendor software rather than creating solutions that match their real needs.
Palihapitiya argued that decades of enterprise software sales have shaped how companies operate, often in ways that do not serve their core business.
“There is a set of legacy incumbent software companies,” he said. “I call it the software industrial complex. What they proved was that a very sophisticated go-to-market strategy could sell trillions of dollars of software and services. But it turned out that actually no, shit software must be sold.”
Palihapitiya said many companies have entire layers of management that exist only to handle software they were sold but may not have needed.
Lütke agreed, saying that companies forfeit control over their operations when they adopt software built for someone else’s problems.
“You don’t have agency over your culture in this area, because you must make an interpretation that is compatible with a piece of software that you have adopted,” he said.
Both argued that companies should focus on building solutions that directly solve their own problems. That means stripping away assumptions, understanding a problem at its most basic level, and building something specific to that challenge, instead of relying on software designed for other businesses.
Lütke explained how Shopify started as a tool he built for his own snowboard store, not as a product he intended to sell. That approach still shapes how he thinks about building companies.
“Coding is actually really valuable because it allows you to prototype for yourself what a solution might look like, so that you can hold it up to see,” Lütke said. “Can I fall in love with that solution? Am I excited by this to a degree that I want to spend my entire career on it? Because that is what excellence eventually comes from.”
For both speakers, AI is not the real opportunity on its own. It is another tool that helps companies who already understand their customers and problems deeply.
Companies that build their own tools will stay ahead. Those who simply add generic AI features without understanding what their customers actually need will not.
As Palihapitiya put it bluntly, “If you are unopinionated, what are you generating? You are generating nothing.” He dismissed much of the AI software being produced today as “crappers that generate crap.”
Infrastructure, power and capital will define who leads next
The conversation then returned to the global level. Both billionaires argued that long-term prosperity will depend on controlling not just technology but the infrastructure that powers it.
“If you’re going to be an entrepreneur today, and you don’t have an existing hundred billion dollar business, what would you do?” Palihapitiya asked. “First, it’s power. In the next 30 or 40 years, you just need to look at the power generation of China versus America. We’re eight terawatts behind.”
Palihapitiya described how his own investments have expanded into energy generation, batteries, data centres, and the materials that support hardware. His decision to acquire land next to Bill Gates’ Arizona smart city project reflects his belief that owning physical infrastructure will determine who shapes the next wave of growth.
Lütke made the same argument. Without enough power, no country can remain competitive for long.
“There has never been such a thing as a low power using prosperous society,” said Lütke. “Power usage is almost a map of GDP of countries.”
Both criticized the idea that higher power consumption is always bad. They argued that this mindset has weakened the West’s ability to compete.
“It might actually be the most incorrect thing,” said Palihapitiya. “There has never been a prosperous society that used less power.”
Palihapitiya said Canada has incredible resources but remains slow to act. He shared how difficult it was to move projects forward in Canada compared to other countries.
“It was easier for me to go to India and get a deal done with the prime minister’s office and Prime Minister Modi for the largest supply of rare earths in the world than it was to come here and talk to somebody in the Canadian government,” he said. “And that is a joke.”
While India is often able to move large industrial projects forward more quickly, it does so within a regulatory environment that balances growth with fewer environmental protections than exist in Canada. The tradeoff between speed and environmental oversight remains a central tension in debates over how countries approach industrial development.
Palihapitiya also criticized Canada’s reliance on government-backed capital.
“You can’t have an environment where the largest player is a government sponsored balance sheet whose entire goal is money velocity and job creation. You need to have private actors who are purely motivated by profit, because in the absence of that, you’re perverting the market.”
Building ambition requires more than good intentions
Both Palihapitiya and Lütke argued that governments need to focus less on intentions and more on creating strong incentives for people to build.
Palihapitiya shared a behavioural study with mice to make his point. In the experiment, mice that were briefly rescued while struggling in water were able to swim much longer when placed back into the same test.
“What it shows you is that mice have the capacity to do things that they were capable of if they get a little bit of help at a critical moment,” he said. “Incentives shape outcomes in society, and what governments can do is have very adequately and rightly defined incentives.”
Lütke said Canada’s biggest problem is not regulation or resources but confidence. The country needs to openly celebrate entrepreneurship and recognize that building companies is a vital act of leadership.
“You need to celebrate the founder of companies. Entrepreneurship is an act of courage and there is glory in it,” he said. “The story that I just told is actually a great story and we should celebrate it, but we don’t.”
The conversation closed with a clear warning.
“In the absence of technical supremacy, you lose economic supremacy,” said Palihapitiya.
By technical supremacy, he was referring to control over the physical and digital infrastructure that supports long-term economic growth, including power, computing, capital, and industrial capacity.
Both agreed that Canada has everything it needs to lead. But leadership will only happen if the country builds the systems, incentives, and ambition to act. Without that, they warned, Canada will watch the next industrial era happen elsewhere.
