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SoftBank Seeks $100 Billion From Gulf for AI and Robotics

SoftBank founder Masayoshi Son is looking to secure up to $100 billion from Middle Eastern investors to establish a new fund targeting company acquisitions that integrate artificial intelligence and robotics.

SoftBank Seeks $100 Billion From Gulf for AI and Robotics

Targeting Middle Eastern Investors for a New Fund

SoftBank founder Masayoshi Son is seeking up to $100 billion from Gulf investors to establish a fund that would acquire companies and improve their operations using artificial intelligence and robotics, as originally reported by the Financial Times. Detailed insights into this strategy were highlighted in a report by [Tom's Hardware](https://www.tomshardware.com/tech-industry/artificial-intelligence/softbank-seeks-usd100-billion-for-ai-refined-projects-from-middle-eastern-investors-fund-would-be-used-to-acquire-companies-and-improve-their-operations-using-artificial-intelligence-and-robotics).

Unlike SoftBank's previous investment vehicles, which primarily financed technology companies, the proposed fund would purchase established businesses. It would then introduce AI and other advanced technologies to improve their operations in a bid to elevate their overall value, representing a relatively novel model to make money on artificial intelligence.

Acquiring Traditional Companies for AI Upgrades

Son has reportedly approached influential investors in the Middle East, including senior figures in the United Arab Emirates, during recent weeks. The objective is to secure capital to acquire companies that have not yet adopted AI and robotics, but which could substantially improve their business positions by integrating these technologies.

SoftBank's robotics and physical AI division, Roze, would reportedly play a major role in these operational transformations, though exact operational details remain unclear at this stage. Son also intends to eventually take Roze public at a substantial valuation, although neither the establishment of the fund nor its financing is guaranteed.

Masayoshi Son
(Image credit: Getty / Bloomberg) · Source: Tom's Hardware

Context of OpenAI Investments and Financial Background

The latest fundraising push comes as SoftBank faces growing scrutiny and concerns over its massive $65 billion investment in OpenAI, alongside its delayed initial public offering (IPO). SoftBank has already committed approximately $65 billion to OpenAI, making it the crown jewel of its overarching investment strategy.

The Japanese firm has financed its investments using internal resources, external capital, and borrowing partly secured by its valuable holdings in Arm. Meanwhile, SoftBank's overall well-being significantly depends on the valuation of OpenAI, which has yet to evolve into a highly profitable company.

Historical Sovereign Wealth Backing and Debt Issuance

Son has a history of attracting substantial financing from Middle Eastern sovereign wealth funds. Saudi Arabia's Public Investment Fund and Abu Dhabi's Mubadala participated in SoftBank's original $100 billion Vision Fund back in 2017.

Since its establishment, Vision Fund 1 has accumulated approximately $29 billion in investment gains, whereas Vision Fund 2, which holds the OpenAI investment and is primarily financed by SoftBank itself, has generated $20.5 billion as of June.

Last month, SoftBank raised more than $11 billion through the largest junk bond issuance on record, featuring yields reaching 9.75% as borrowing risks remain elevated. As of June, the company's net asset value stood at ¥72.3 trillion ($456.57 billion), with a loan-to-value ratio of 13%.

Sources

  • Tom's HardwareSoftBank seeks $100 billion for AI-refined projects from Middle Eastern investors

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