Home Technology IBM bets $500M on business-focused AI startups

IBM bets $500M on business-focused AI startups

IBM bets $500M on business-focused AI startups


IBM announced today that it plans to invest $500 million in generative AI startups catering to business customers, signaling the technology giant’s entrance into the AI investment race.

Generative AI, which can generate original text, images, audio, and more, has seen rapid advancements recently from companies like OpenAI and Anthropic. IBM’s investment aims to tap into this burgeoning field.

“With the launch of the IBM Enterprise AI Venture Fund, we’re opening another channel to harness 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 of software and chief commercial officer, in an interview with Axios.

Thomas said the $500 million investment underscores IBM’s message to startups that it is not the same company as in years past. IBM plans to invest across all startup stages without setting targets for the number of deals or timelines.

IBM has already participated in funding rounds for AI startups Hugging Face and HiddenLayer.

The company is particularly interested in startups focused on industry verticals like healthcare or specific business processes, as long as they don’t compete directly with IBM’s offerings.

Thomas said IBM has heard from clients this year that many have experimented with AI but have not seen much return on investment yet. He expects more startups will shift to serve business clients as they seek sustainable models. Additionally, Thomas believes companies outside the U.S. may lead this AI wave, though IBM plans to look for investments everywhere.

The $500 million investment indicates IBM’s embracing AI’s potential to transform businesses. With tech giants like Microsoft and Meta also dedicating large sums to AI, the field is attracting intense interest and funding that could accelerate innovations. IBM aims to be at the forefront of this AI revolution.

Featured Image Credit: Lukas Kosc; Pexels; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.


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