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IBM, having made an investment in Hugging Face, introduces a $500 million enterprise AI venture fund.

ByYasmeeta Oon

Nov 8, 2023

IBM, having participated in a $235 million series D funding round for the open-source AI platform Hugging Face in August, announced today its intention to significantly bolster its investments in enterprise AI-focused startups. The company is launching a substantial $500 million venture fund dedicated to backing a variety of AI enterprises, ranging from early-stage ventures to rapidly expanding startups. The fund’s primary focus will be on advancing generative AI technology and research for the enterprise.

IBM’s commitment to fostering “responsible AI innovation” is at the core of this initiative. Rob Thomas, Senior Vice President, Software, and Chief Commercial Officer at IBM, emphasized the fund’s role in doubling down on their dedication to responsible AI innovation through Watsonx, facilitating organizations in implementing this transformative technology.

Clem Delangue, co-founder, and CEO of Hugging Face, lauded IBM for its collaborative efforts in enhancing the open-source ecosystem by contributing numerous open models to the Hugging Face hub. He noted that this collaboration was a key reason for IBM’s involvement in their series D round, expressing confidence in IBM’s ability to amplify its impact on AI with the IBM Enterprise AI Venture Fund.

IBM’s commitment to the AI startup landscape extends beyond this venture, as the company has already invested $50 million in a series A round for Hidden Layer, a provider specializing in AI model and asset security.

IBM’s initiative reflects a broader trend of corporate venture capital firms actively engaging in the burgeoning AI startup ecosystem, a phenomenon often referred to as “riding the AI startup wave.” Other major companies, such as Salesforce, Workday, OpenAI, and Amazon, have established substantial venture funds for similar purposes.

These investments are occurring in a context where IBM CEO Arvind Krishna has been addressing concerns and working on “damage control” following his controversial remarks regarding AI-related job losses in May. He clarified his stance at a recent event, affirming that while automation might affect repetitive white-collar jobs, IBM is not downsizing its workforce and, in fact, intends to hire more employees.

Yasmeeta Oon

Just a girl trying to break into the world of journalism, constantly on the hunt for the next big story to share.