IBM is forming a $500 million venture fund to invest in a diverse set of AI firms, ranging from early-stage to hyper-growth startups, with the goal of driving generative AI technology and research for the industry. IBM is the sole investor of the Enterprise AI Venture Fund. The fund aims at fostering AI innovation and strategic alliances while producing profits.

The IBM Enterprise AI Venture Fund will invest in present and future AI leaders that are assisting organizations across the globe in realizing the promise of AI for business via a distinctive model and approach that includes domain knowledge from across IBM and a dedicated portfolio development team. The fund would provide each startup with opportunities to develop meaningful partnerships with IBM while gaining operational expertise on product and engineering and go-to-market strategies. It will be led by a dedicated team at IBM with decades of combined experience as highly successful investors and enterprise AI experts.

IBM has a long history of offering proven business AI technology and capabilities to companies across the globe, and with watsonx, the company’s AI and data platform, it is capitalizing on the newest wave of AI innovation in generative AI. The IBM Enterprise AI Venture Fund would help IBM expand its ecosystem of AI relationships, including partnering with startups that use and build on Watsonx, and generate long-term value for AI leaders as well as new and current customers.

“By 2030, AI is expected to unlock nearly $16 trillion in productivity. With the launch of the IBM Enterprise AI Venture Fund, we’re opening another channel to translate the enormous potential of the AI revolution into tangible, positive outcomes for IBM and the companies we invest in,” said Rob Thomas, IBM’s Senior Vice President, Software and Chief Commercial Officer. “This fund is yet another way we’re doubling down on our commitment to responsible AI innovation through watsonx and helping organizations put this transformational technology to work.”

A Unique Approach to AI Investing

IBM’s recent investments in AI technology and startups highlight its commitment to pushing AI for business. In August, IBM announced its participation in Hugging Face’s $235 million Series D fundraising round, the largest open-source collaboration platform for the machine learning community shaping the future of AI. Hugging Face has received hundreds of open models and datasets from IBM, including the recently released Geospatial Foundation Model in collaboration with NASA. It is Hugging Face’s biggest geographic foundation model and the first open-source AI foundation model produced in conjunction with NASA.

Clem Delangue, co-founder and CEO of Hugging Face, said, “We’ve been thrilled to collaborate with IBM in democratizing AI. They are greatly enhancing the open-source ecosystem by hosting hundreds of open models on the Hugging Face portal. This is why we wanted them to participate in our Series D round. With the IBM Enterprise AI Venture Fund, I am certain that they will be able to accelerate their effect on AI.”

IBM has recently invested in HiddenLayer‘s Series A fundraising round in order to grow its talent base, improve go-to-market activities, and develop further in its award-winning Machine Learning Security (MLSec) Platform. HiddenLayer is a top security provider for AI models and assets, and this fundraising round represents the biggest Series A funding round received this year by a cybersecurity firm focusing on AI protection.

“IBM’s commitment to progressing secure and responsible AI, access to global clients, and the scale of one of the most innovative companies in the world has made them the perfect partner to support us in driving the next stage of our business growth,” said Chris Sestito, CEO and Co-founder of HiddenLayer. “Our collaboration will enable us to provide our AI threat detection skills to the world’s most innovative firms.”

The announcement builds on IBM’s watsonx’s momentum and market acceptance, and it would advance the company’s goal of utilizing both third-party and its own AI models to promote open innovation in AI. In September, IBM announced the public release of the first models in the Watsonx Granite model series – a set of generative AI models designed to accelerate the incorporation of generative AI into business applications and processes.

IBM also affirmed that the typical contractual intellectual property protections for IBM products would apply to watsonx AI models produced by IBM. IBM also revealed intentions earlier this year to host Meta’s Llama 2-chat 70 billion parameter model inside watsonx, further on the company’s goal of employing both third-party and its own AI models to sustain open innovation.