Wondering which corporate venturers have specialist investment funds for artificial intelligence? Here is the list of traditional funds and new units, offshoots and accelerators.
If one thing has marked out 2023, it has been the emergence of generative artificial intelligence, which has brought forth a new wave of billion-dollar unicorn startups as it promises to transform a wide range of industries.
But this year is not the first time a company has launched a dedicated AI fund. So, which corporates have formed one, how long have they had it and where are they investing? Here’s the full round up so far – we’ll update this as new initiatives spring up:
The First Wave (The O.G.s)
IBM (Watson Fund – now defunct)
Computing technology producer IBM launched AI query system Watson in 2010 and it gained publicity the following year when it won a special episode of TV quiz show Jeopardy! In 2014, the corporate ploughed $1bn into a dedicated Watson division that included a $100m fund designed to create an ecosystem around the technology.
The fund’s deals included healthcare software provider Welltok, which hit an $850m valuation in 2020 before being acquired by Virgin Pulse the following year. But the Watson fund was never that active, and although IBM still has an ecosystem partner programme for Watson, its corporate VC activity now takes place under the IBM Ventures banner. Watson has had more success being used in AI-powered exchange-traded fund AIEQ.
Toyota (Toyota AI Ventures – now defunct)
The carmaker’s Toyota Research Institute invested $100m in a fund aimed at AI, robotics and data technology in 2017, and it had accumulated a 19-strong portfolio by the time Toyota launched a $100m Fund II two years later. Its biggest exit was the $6.6bn reverse takeover of air taxi developer Joby Aviation in 2021.
Toyota ended up reorganising its CVC funds the same year, absorbing the Toyota AI Ventures companies into a newly rebranded Toyota Ventures. The corporate now backs AI technology startups through Toyota Ventures’ Frontier Fund, while growth-stage companies can get funding through its Woven Capital subsidiary.
Google (Gradient Ventures)
Internet technology provider Google launched Gradient in 2017 as an AI fund to complement GV and CapitalG, the corporate venture units overseen by parent group Alphabet. Six years on, it’s still run by founding managing partner Anna Patterson.
Gradient was one of the more active early-stage funds even before this year, when its investment pace ramped up significantly. It now counts 186 portfolio companies (and more in stealth) and has accumulated several M&A exits in the past 18 months, including virtual care platform Klara which was bought for $200m early last year. Collaboration software provider Mural is one of the few Gradient portfolio companies to disclose a unicorn valuation, though this may well change in the coming months when investment ramps up in the space.
SoftBank (Deepcore)
Japanese telecoms and internet group SoftBank formed a domestic fund called Deepcore in 2018 with just over $50m and a mission to fund AI startups at seed and early stages. It racked up several deals in its first year including a series A investment in Telexistence, a shelf-stacking robotics developer that closed a $170m round featuring SoftBank last month.
SoftBank launched a $55m second Deepcore fund in 2019 and its portfolio now stands at more than 70 startups. Deepcore, which has formed partnerships with corporates such as Nvidia and Zeroth, remains active in 2023 and has widened its focus to more companies outside of Japan. Those include Builder.ai, the UK-based creator of an app development platform, which recently completed a $250m series D round.
Qualcomm (Qualcomm Ventures AI Fund)
Mobile chipmaker Qualcomm’s corporate venture subsidiary channelled $100m into a specialist AI fund also, in 2018, with the intention of building on its internal AI research by accessing startups in areas like autonomous cars, robotics and machine learning platforms.
The fund’s first investment was in Israeli facial recognition startup AnyVision, which has since reached unicorn status. Subsequent AI deals took place under the banner of Qualcomm Ventures. Although the unit has more than 30 active AI-focused portfolio companies, it is unclear whether those investments are still made through a separate fund.
The 2023 class (The Generative Gang)
Salesforce (Salesforce Ventures Generative AI Fund)
The enterprise software provider announced a $250m Generative AI Fund in March this year along with four portfolio companies. Unlike previous CVC funds that concentrated on products that use AI, Salesforce’s was focused squarely on the large language models that make up generative AI programs, and that initial portfolio included unicorns Anthropic and Cohere.
The unit doubled the size of fund to $500m just two months later, by which time Anthropic had raised another $450m at a valuation approaching $5bn and Cohere had closed a $270m round valuing it above $2bn. Subsequent deals include a $100m series B round for AI content creation platform Typeface at a $1bn valuation and a $141m series C extension for its peer, Runway, that valued it at $1.4bn.
Amazon (AWS Generative AI Accelerator)
Amazon’s AWS cloud services subsidiary is betting big on generative AI and in April it launched a dedicated accelerator for startups in the sector, backed by partners including venture firms Sequoia Capital and Radical Ventures.
The scheme offers $300,000 in AWS credits to participants along with mentorship, and the accelerator announced the inaugural batch of 18 startups back in May. The first demo day was scheduled for the end of last month.
Baidu (Baidu Wenxin Investment Fund)
Once known as China’s Google, Baidu has expanded its search engine into a diversified internet company covering news, games, a social network and mobile payment. It unveiled an AI chatbot called Ernie (or Wenxin, in China) in March and formed a dedicated investment vehicle, Baidu Wenxin Investment Fund, two months later.
The fund is equipped with about $140m in capital and it was launched together with the Wenxin Cup, a contest where entrepreneurs can submit their generative AI projects to win a prize sized at approximately $1.4m. It is yet to officially disclose its first deal, though sister unit Baidu Ventures backed generative AI startup Shengshu Technology’s $14m angel round in June.
Dedicated units (The Raison d’êtres)
OpenAI (OpenAI Startup Fund)
OpenAI’s launch of advanced AI chatbot ChatGPT may have represented ground zero for generative AI hype, but the company had actually formed its own early-stage investment fund as far back as mid-2021, in partnership with its largest investor, Microsoft.
The company waited until the end of 2022 to announce its first four portfolio companies – Descript, Harvey AI, Mem and Speak – and increased the size of the fund from $100m to $175m in May this year. It has also launched an accelerator scheme called Converge that offers $1m in equity financing for each participating startup.
Dropbox (Dropbox Ventures)
Data software provider Dropbox had been an occasional startup investor, most notably providing $5m for enterprise software management platform BetterCloud in 2019. But it had never actually put together its own CVC unit.
That changed in June when it took the wraps off a $50m fund dubbed Dropbox Ventures that was put together to invest in developers of AI tools and applications. The unit, announced together with AI products Dropbox Dash and Dropbox AI, has so far not revealed any deals or portfolio companies.
Other developments
Although they may not have formed dedicated funds for AI technology, the following units have launched initiatives in response to the AI boom:
Workday: The company doubled the capital available for its Workday Ventures unit to $500m in February. The business management software producer said at the time of the announcement that it planned to now put more money into emerging technologies like generative AI.
Comcast: The mass media group set generative AI as the subject for the first themed cohort of its Comcast NBCUniversal Lift Labs accelerator in April 2023.
ServiceNow: Digital workflow software producer ServiceNow added $1bn in capital to corporate VC arm ServiceNow Ventures in May, citing AI and machine learning as two of its key investment areas.
Solana: Solana Foundation, the owner of cryptocurrency software provider Solana, boosted the size of its AI grant fund from $1m to $10m in May. It will supply grants of up to $25,000 to projects that combine the Solana blockchain with AI technology.
SAP/Sapphire Ventures: Sapphire, which spun off from SAP and still counts the enterprise software producer as a major backer, announced in July it is committing $1bn to AI-powered enterprise technology startups, in areas including generative AI.
Kasikorn Bank: The Thai bank’s latest fund, KXVC, is a $100m vehicle which was set up in September to invest in edge technologies, with AI and Web3 the two main focus areas.
Mitsubishi UFJ Financial Group: Japan-based financial services firm MUFG launched the $136m latest fund for strategic investment arm MUFG Innovation Partners the same week, expanding its technology sphere to generative AI.
T-Mobile: Corporate venture unit T-Mobile Ventures launched its second fund in September, adding AI to the 5G-focused technology in which it invests on behalf of its mobile network operator parent.
