Building A $190 Million AI Venture Studio That Works
For Warren Packard, partner at AI Fund, the future lies in providing more than funding to early-stage startups building AI-first products. 'We don't wait for ideas to walk through the door,' said Packard in an interview. 'We build them internally and recruit the right entrepreneur at the right moment to lead the company forward.'
Founded by AI pioneer Andrew Ng, AI Fund operates as a venture studio developing AI-focused businesses through a hands-on, repeatable model. Earlier this year, the firm closed its $190 million Fund II, which it will use to co-found more than 25 new startups. Packard emphasized the value of speed and depth in the studio approach: 'The studio model enables us to compress the company-building timeline and build stronger foundations from day one.'
AI Fund's second fund is backed by a mix of corporate and institutional LPs, including HP Inc., TELUS Ventures, and Sequoia Capital. This reflects the growing interest from corporates in gaining early access to transformative AI technologies while mitigating early-stage risk.
'Our best ideas are often born from conversations with our LPs,' Packard noted. 'We're able to spin up companies that launch with built-in customer demand, proprietary datasets and immediate market relevance.'
That structure provides value to limited partners and also mitigates risk, as shared services and playbook-based development create economies of scale not available to traditional angel or seed investors.
Packard emphasized the speed and depth of the fund's infrastructure: 'From idea to MVP, we can move in weeks, not quarters. That's because we've already built the tools, the team, and the validation process.'
Startups developed at AI Fund leverage foundation models and internal AI scaffolding from inception. This parallels what McKinsey & Company describes as a 'shift from AI experimentation to strategic value realization,' where organizations integrating AI into core product cycles see faster returns and more durable models.
The venture studio model introduces a different equity structure than traditional VC. AI Fund takes an early ownership stake in exchange for operational support, talent infrastructure, and capital at formation. 'We are not just advisors. We're building alongside the founders,' Packard said.
This co-founder dynamic results in alignment. Founders join with clear expectations, and LPs gain exposure to companies with already-in-place institutional processes.
Packard was unequivocal about the fund's values: 'We are very much focused on companies that move humanity forward. We don't want to create ventures that make it easier for people to do harm.'
That principle is embedded in how the fund evaluates ideas. Ethical constraints are built into our validation stage. 'We're not just looking at the technical feasibility, we're asking if this should exist,' he said.
A recent Edelman Trust Barometer found that 60% of employees value ethical commitments in their workplaces and use those values as a deciding factor in employment or investment decisions. That mirrors a growing trend in venture and private equity toward values-aligned investing, particularly in sensitive sectors like AI.
AI Fund offers a proven case study for venture capital, corporate venture capital and innovation firms exploring whether to build internal studios, partner with external ones, or form hybrid innovation arms. It provides an unfair advantage to help the studio startups thrive.
'The combination of AI expertise, operational infrastructure, and repeatable methodology allows us to launch multiple companies a year with real market fit and founder readiness,' Packard said. With over 30 exits to his name, he sees the studio not as a trend, but as a core innovation lever. 'AI is here for the long run. The best way to build responsibly and effectively is to start at the idea stage, not wait for disruption to come to you.'
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