IBM puts $500M into its venture fund for enterprise AI.

IBM has announced a $500 million investment fund to back AI startups focused on enterprise and business customers. IBM wants to tap into innovative technologies and business models outside the company with this fund.

What's going on here?

IBM is jumping into the AI investing race to transform into a more startup-friendly company.

What does this mean?

The $500M fund is an open broadcast to entrepreneurs that IBM is open for business and wants to work with new AI companies, just like other big tech companies.

Specifically, IBM plans to invest across all stages without fixed targets. It has already backed prominent AI startups Hugging Face and HiddenLayer. The focus is on startups with AI solutions tailored to specific industries or business functions. IBM wants to avoid funding direct competitors to its portfolio companies.

Rob Thomas, Chief Commercial Officer at IBM also feels that this wave may be led by companies (and markets) outside the US.

Why should I care?

IBM's want to reinvent itself into a more startup-oriented company compared to its former self. IBM likely hopes these investments will produce new technologies and revenue streams.

This investment fund signals an impending shakeup in enterprise AI. IBM's openness to startups may accelerate AI adoption in more regulated sectors like healthcare, finance and manufacturing.