Montreal’s notoriety in AI leadership may have taken another big step forward.

Big news Monday morning as Microsoft Ventures announced it’s investing in Montreal’s all-star group of AI researchers, Element AI. Moreover, the tech giant’s VC arm announced it’s launching a new fund for AI startups, signalling a clear intent to enter the AI venture game.

In a blog post titled “Microsoft Ventures: Making the long bet on AI + people,” Microsoft Ventures’ Nagraj Kashyap wrote that its first investment would go to Element AI, the Montreal-based incubator and platform.

Founded by serial entrepreneurs Jean-François Gagné, Nicolas Chapados and Yoshua Bengio, a world leader in deep learning technology, Element AI launched to help organizations implement an “AI-First” strategy, enabling any organization to develop their own artificial intelligence solutions. The team has strong connections across the top research labs in North America.

“Together with Element AI, we can connect human and machine intelligence to fuel powerful solutions,” wrote Kashyap.

According to the Globe and Mail’s Sean Silcoff, Element AI plans to hire 40 people by February, while drawing on the expertise of AI faculty at University of Montreal, McGill University and University of Toronto.

“We’ll see opportunities nobody else can see because of the unique relationship will build with a bunch of partners,” Gagne told the newspaper. He declined to disclose the size of Microsoft’s investment.

Silcoff wrote in his piece that the investment marks “another endorsement of the city’s reputation as an emerging global centre for one of most anticipated technology trends.”

“We all know ‘you’re only as good as your tools’ and now Element AI is getting supercharged with Microsoft Ventures,” said Element.AI’s Gagné. “Along with a strategic investment that is a real vote of confidence for Element AI, Microsoft is giving us the tools and services which will help our AI network achieve scale, which will undoubtedly create new technologies that help tackle some of the world’s biggest problems.”

For Microsoft, it’s newfound interest in AI comes from a set of goals that CEO Satya Nadella outlined earlier.

“AI must be designed to assist humanity; be transparent; maximize efficiency without destroying human dignity; provide intelligent privacy and accountability for the unexpected; and be guarded against biases. These principles guide us as we move forward with this fund.”

As Techcrunch’s Ingrid Lunden wrote, in an area where “key competitors like Google, Salesforce, Apple and many others are also going in very heavy…Microsoft has to keep up.”

Three weeks ago Google also invested in Montreal’s AI community, pouring $4.5-million over three years to support the MILA institute’s research, as well as opening an AI research group at its Montreal office.

Microsoft indicated it’s trying to take a more collaborative, and less proprietary approach. It’s also a partner in OpenAI and is a member of the Partnership on AI organization.

Kashyap wrote that the move was made to “democratize AI” since the types of companies it will invest in are “focused on inclusive growth and positive impact on society.”

“I’m not sure if Tact entirely fits that bill, but maybe even CRM software has a social-good angle, and at least Tact will aim to make it usable by more people,” added Techcrunch’s Lunden.

More interesting commentary by Lunden: “It sounds like Microsoft is approaching this investment not just as financial backing, but also as more pragmatic operational backing. It is providing software, cloud storage via Azure, and more of Microsoft’s existing tools. This ensures that whatever does get built, it has some degree of Microsoft baked into it.”

Since forming its team earlier this year, Microsoft has invested in 19 companies. Along with the new Element.AI investment, Microsoft Ventures also closed the following five investments in the U.S. and one in Israel:

• i3 Equity Partners – an investment vehicle dedicated to early-stage investments in Israeli IoT startups
• Zipwhip – a SaaS provider that enables businesses to send and receive text messages on existing landline, VoIP and toll-free phone numbers
• Paxata – a platform provider that enables business analysts with an enterprise-grade, self-service data preparation system
• xAd – a location intelligence software company that helps marketers unlock opportunities in the 90 percent of retail transactions that are still completed offline
• Dynamic Signal – a communications platform company that increases productivity and employee engagement with timely, relevant content across multiple channels and devices
• Tact – a sales experience platform that transforms a salesperson’s connected device into an AI-powered smart assistant