Airbus Group SE, Europe's largest aerospace company, is establishing a venture capital arm in Silicon Valley along with a business innovation center headed by an ex-Google Inc. executive as it tries to maintain a technology edge in the face of a new breed of potential rivals.

The Toulouse-based company will spend an initial $150 million on its Airbus Group Ventures business to be led by Tim Dombrowski, a former partner of technology venture capital powerhouse Andreessen Horowitz. The unit's mandate is to "invest in promising, disruptive and innovative business opportunities generated around the globe," Airbus said on Friday.

Paul Eremenko, who was director of engineering at Google's secretive Advanced Technology and Projects organization and also worked for the Pentagon's Defense Advanced Research Projects Agency technology incubator, will be chief executive of Airbus Group Silicon Valley technology and business innovation center, the company said.

"Silicon Valley serves as a unique hub for technology breakthroughs and we see huge opportunities to learn from, and partner with the many players based there," Airbus Chief Executive Tom Enders said in a statement.

Mr. Enders has become concerned that newcomers to the industry may turn into formidable rivals to the European aerospace giant along with more traditional competitors such as Boeing Co. That's already happening in space where entrepreneur Elon Musk's space company, Space Exploration Technology Corp., or SpaceX, has made inroads into the commercial satellite launch market. The U.S. Air Force this week also cleared SpaceX for military launches.

"With this approach, we will accelerate our transformation into an international leader in aerospace technology innovation," Mr. Enders said. The two new executives will report directly to Mr. Enders.

Other European aerospace companies also are trying to become more proactive in reaching out to technology startups. Safran SA, the French engine and aircraft partners maker, this month said it has set up a venture capital unit with an initial €50 million ($55 million) investment over a three-year period. Investments will initially target Europe and the U.S., though eventually the company plans to look farther afield.

Airbus's commercial jetliner unit, the company's largest source of sales and profit, this year also set up the first in a series of BizLabs in Toulouse to work with start-ups and others. The organization is staffed by Airbus employees that will work with selected partners to apply technologies from outside the aerospace area to the company's jetliners and services offering, said Fabrice Bregier, head of the plane-making business.

Airbus this month issued its first call for project entries for the business innovation center with submissions due June 11. The plane maker plans to set up similar business accelerator organizations in Hamburg and Bangalore, India.

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