IBM, which invested in Hugging Face, launches $500M enterprise AI venture fund

IBM, which in August took part in a $235 million series D funding round for open source AI platform Hugging Face, announced today that it is planning to invest more in enterprise AI-focused startups — much more. It is launching a $500 million venture fund that will invest “in a range of AI companies – from early-stage to hyper-growth startups – focused on accelerating generative AI technology and research for the enterprise.”

Commitment to ‘responsible AI innovation’

In a press release, Rob Thomas, senior vice president, software and chief commercial officer, IBM. “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.”

And Hugging Face co-founder and CEO Clem Delangue praised IBM for its collaborations to boost the open-source ecosystem with hundreds of open models on the Hugging Face hub. “This is the reason why we wanted to have them join our series D round,” he said. “I am convinced that they’ll be able to accelerate their impact on AI with the IBM Enterprise AI Venture Fund.”

IBM is ‘riding the AI startup wave’

IBM has also already invested in a $50 million series A round for Hidden Layer, a security provider for AI models and assets.

Axios reported that the IBM fund is the latest example of corporate VCs “riding the AI startup wave,” following other companies with large venture funds including Salesforce, Workday, OpenAI and Amazon.

The investments come as some have reported that IBM CEO Arvind Krishna has been working on some “damage control” after his controversial comments about AI-related job losses last May. At an event last week, he said that while ‘the first thing you can automate is a repetitive, white-collar job,’ he is not cutting workers — and in fact will “get more.”