This Big Technology Firm Is Getting in the AI Investment Game

There’s profit in artificial intelligence potential.

The artificial intelligence market is in gangbusters’ mode in late 2023, with AI’s reach expanding deeply into all four corners of the global enterprise market.

Consider these statistics:

The AI market will crest $407 billion by 2027, up from $86.9 billion revenues in 2022.

A whopping 97% of business owners believe Open AI’s ChatGPT AI platform will boost their revenues by making simple tasks, like writing website copy or handling customer service questions, much more efficient.

64% of business owners believe AI will “increase business productivity”.

One particular area of growth may catch the eye of corporate financial executives – private investment.

According to a recent report by Goldman Sachs, global AI investment will rise from $100.2 billion in 2023 to $158.4 billion in 2025. Private AI investment is already especially impactful, representing 51.6% of all AI investments in 2022.

Big Blue is Pouring Billions Into AI Investment

One of the larger and more noteworthy companies directly investing in AI is IBM, which just announced it’s rolling out a $500 million venture fund “to invest in a range of AI companies – from early-stage to hyper-growth startups – focused on accelerating technology and research for the enterprise.”

The strategy is as close to a partnership/incubator role as anything else.

According to IBM, the private investment approach will offer consistent “domain expertise” from across IBM along with a “dedicated portfolio development team”.

The technology titan is calling the private investment initiative the “IBM Enterprise AI Venture Fund” which will invest in current and future AI leaders that aid companies around the world realize the potential of AI for business.

“Led by a dedicated team at IBM with decades of combined experience as highly successful investors and enterprise AI experts, the fund will provide each startup with opportunities to develop meaningful partnerships with IBM, while gaining operational expertise on product and engineering and go-to-market strategies,” the company stated in a November 7, 2023 release.

Big Blue’s outlook on AI is even more bullish than the projected growth numbers listed above.
The company says AI is slated to unlock nearly $16 trillion in productivity by 2030.

The company has already dipped its toes into the AI investment waters. Last August, IBM announced its participation in the $235M Series D funding round of Hugging Face, an emerging open-source collaboration platform for the machine learning community building the future of AI.

The company also recently contributed to HiddenLayer’s Series A funding to expand its talent base, increase go-to-market efforts, and help build its Machine Learning Security (MLSec) Platform. HiddenLayer is a rising security provider for AI models and assets, and the funding round marks the largest Series A funding raised by a cybersecurity company focused on protecting AI in 2023.

Not many CFOs can compete with IBM at the private investment level (Big Blue owns a $136 billion market cap), but there’s little doubt that latching on to the AI bandwagon is a savvy move for corporations of every size.

For those profit-minded companies, the question is when, and not if, it’s time to push a pile of cash onto the private AI investment table.

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