IBM Launches $500M Enterprise AI Venture Fund Following Investment in Hugging Face

IBM recently participated in a $235 million Series D funding round for the open-source AI platform Hugging Face and announced its plans to significantly increase investments in enterprise AI-focused startups. The tech giant is launching a $500 million venture fund aimed at supporting a diverse range of AI companies, from early-stage to hyper-growth startups, that are focused on advancing generative AI technology and research for enterprises.

Commitment to Responsible AI Innovation

In a press release, Rob Thomas, Senior Vice President of Software and Chief Commercial Officer at IBM, emphasized the company's dedication to responsible AI innovation through Watsonx. He stated, “This fund is yet another way we’re doubling down on our commitment to responsible AI innovation and helping organizations harness this transformative technology.”

Hugging Face co-founder and CEO Clem Delangue praised IBM for its role in enhancing the open-source ecosystem, highlighting the wide array of models available on the Hugging Face hub. “This is why we invited them to join our Series D round,” he noted. “I am confident that the IBM Enterprise AI Venture Fund will significantly accelerate their impact on AI.”

IBM Riding the AI Startup Wave

IBM's investment strategy extends to a $50 million Series A round for Hidden Layer, a provider of security solutions for AI models and assets.

According to Axios, IBM's new fund reflects a trend of corporate venture capitalists capitalizing on the thriving AI startup landscape, joining the ranks of other companies like Salesforce, Workday, OpenAI, and Amazon, which have also established significant venture funds.

These investments emerge amidst IBM CEO Arvind Krishna's efforts to manage perceptions following his controversial remarks regarding AI-related job losses made last May. In a recent event, he clarified that while automation may primarily affect repetitive white-collar roles, the company is not reducing its workforce but instead aims to expand it.