SoftBank's Masayoshi Son seeks up to $100 billion from Gulf investors for AI push
In short
SoftBank Group founder Masayoshi Son is seeking to raise up to $100 billion from Gulf investors to expand his AI investments, the Financial Times reported on October 9, according to IT Home. Son has held talks in recent weeks with senior figures including people from the UAE, and plans to use the money for a fund that would acquire companies and improve their operations with AI, people familiar with the matter said.
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SoftBank Group founder Masayoshi Son is seeking to raise up to $100 billion from investors in the Gulf region to further expand his AI investments, according to a Financial Times report on the afternoon of October 9 cited by IT Home. CLS, 36Kr and Jiemian also reported the plan. People familiar with the matter said Son has discussed the fundraising over the past few weeks with several senior figures, including people from the United Arab Emirates. [ 1 , 2 , 3 , 4 ]
According to people familiar with the matter, Son plans to use the Gulf money to set up a fund that would first acquire companies and then use AI and other advanced technologies to improve their operations. 36Kr, citing Sina Finance, said the fund would directly buy traditional or technology companies and would operate differently from before. IT Home reported that Roze, SoftBank's robotics and physical AI business, is expected to play an important role in the plan, and that Son wants to list Roze at a high valuation. [ 2 , 4 ]
IT Home described the plan as the latest in a series of AI investments by Son, who has put $65 billion into OpenAI. It said OpenAI has delayed its IPO and markets have begun to worry about SoftBank's exposure to AI, prompting some investors to reassess whether Son can keep investing heavily. Earlier reports that OpenAI's annualised revenue was about $20 billion below what the company had disclosed sent SoftBank shares down 5% that day, IT Home said. SoftBank shares are up 25% this year but more than 30% below their June high; in June the company briefly became Japan's most valuable company. [ 4 ]
Son has sought Gulf money before. In 2017 the UAE sovereign wealth fund Mubadala and Saudi Arabia's Public Investment Fund invested in SoftBank's first Vision Fund, which had a size of $100 billion. As of the end of June, the first Vision Fund had made about $29 billion in investment gains since its launch and the second about $20.5 billion; the second fund is mainly funded by SoftBank and holds OpenAI shares. Son has combined fundraising with borrowing, partly backed by SoftBank's shares in chip designer Arm, and last month SoftBank raised more than $11 billion through a high-yield bond issue with yields of up to 9.75%. [ 4 ]
How much SoftBank can borrow depends on the valuation of the assets on its balance sheet. At the end of June its net asset value was 72.3 trillion yen and its loan-to-value ratio was 13%, below the 25% cap it sets under normal operations. SoftBank executives believe short-term swings in the valuation of OpenAI or other large holdings would not affect the group's investment plans. Analysts and people close to SoftBank said a fall in OpenAI's valuation could still cause trouble because much of its investment is tied to OpenAI or the AI sector, and an Asia-based analyst warned that knock-on effects could quickly become "quite serious". [ 4 ]
Why it matters
IT Home reported that the plan comes as OpenAI has delayed its IPO and markets worry about SoftBank's exposure to AI, with some investors reassessing whether Son can keep investing heavily. Analysts and people close to SoftBank cited by IT Home said much of SoftBank's investment is tied to OpenAI or the wider AI sector.
Key facts
- Masayoshi Son is seeking to raise as much as $100 billion from Gulf investors to expand SoftBank's AI investments. [ 1 , 2 , 3 , 4 ]
- Son has discussed the fundraising in recent weeks with several senior figures, including people from the UAE. [ 2 , 3 , 4 ]
- The money would go into a fund that would acquire companies and then use AI to improve their operations, according to people familiar with the matter. [ 2 , 4 ]
- The Financial Times reported the plan on the afternoon of October 9, according to IT Home. [ 4 ]
- Son has previously invested $65 billion in OpenAI, IT Home reported. [ 4 ]
- In 2017 Mubadala and Saudi Arabia's Public Investment Fund invested in SoftBank's first Vision Fund, which had a size of $100 billion. [ 4 ]
- Last month SoftBank raised more than $11 billion through a high-yield bond issue with yields of up to 9.75%. [ 4 ]
- At the end of June SoftBank's loan-to-value ratio was 13%, below its 25% cap. [ 4 ]
Confirmed by several sources
- SoftBank's Masayoshi Son is seeking to raise as much as $100 billion from Gulf investors to expand AI investments. [ 1 , 2 , 3 , 4 ]
- Son has held talks in recent weeks with senior figures, including people from the UAE. [ 2 , 3 , 4 ]
- The money would fund a vehicle that acquires companies and uses AI to improve their operations. [ 2 , 4 ]
Still unclear
- Whether Gulf investors will commit the money. The reports describe talks and a target; IT Home refers to the funds arriving only as a possibility.
- The exact size of the target. CLS gives $100 billion, while 36Kr, Jiemian and IT Home say up to $100 billion.
- The role of Roze and plans to list it at a high valuation. Only IT Home reports this.
- Whether problems at OpenAI will affect SoftBank's investment plans. IT Home reports SoftBank executives say short-term valuation swings will not, while analysts and people close to SoftBank warn they could cause trouble.
What local media are saying
Timeline, local time
- CLS reports SoftBank is seeking $100 billion from Gulf investors for AI investments. [ 1 ]
- 36Kr reports details of the planned fund, citing Sina Finance. [ 2 ]
- Jiemian reports Son's talks with senior figures including from the UAE. [ 3 ]
- IT Home publishes a detailed report citing the Financial Times. [ 4 ]