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Masayoshi Son is seeking to raise up to $100bn from Gulf investors, as the SoftBank founder hunts for fresh financial firepower to scale up a colossal AI bet that has already made him one of the technology’s biggest champions.
Son has held discussions in recent weeks with senior figures, including in the United Arab Emirates, over the possible fundraising, according to multiple people familiar with the matter.
The fundraising effort is the latest in a series of big AI bets by the buccaneering Japanese billionaire, including a $65bn investment in ChatGPT maker OpenAI.
It also comes as a delay to OpenAI’s long-anticipated initial public offering, and fears over the scale of SoftBank’s exposure to the AI boom, have prompted some investors to reassess Son’s ability to plough more money into a technology he has hailed as revolutionary.
As part of the possible Gulf fundraising, the SoftBank founder would use the money to set up a fund to buy companies and then use AI and other advanced technology to improve their operations, the people said.
Roze, SoftBank’s robotics and physical AI business that Son hopes to take public at a lofty valuation, is expected to play a key role in this process.
There is no guarantee the talks with Gulf investors will be successful, the people added.
In recent years, Gulf nations have deployed part of their vast wealth into the artificial intelligence sector to diversify their energy-dependent economies.
Abu Dhabi, in particular, has emerged as one of the world’s biggest spenders on AI through vehicles such as the AI-focused fund MGX and AI holding company G42. Representatives for both companies did not respond to requests for comment.
SoftBank declined to comment.
Son remains one of the most controversial investors in technology, with an investment strategy that some regard as tantamount to gambling. The approach has occasionally resulted in eye-catching failures such as WeWork, which filed for bankruptcy in late 2023.
However, he has also enjoyed spectacular success, most notably with Alibaba, and has repeatedly reinvented SoftBank, first as a telecoms group and now as one of the world’s biggest backers of AI.
Son has previously turned to Gulf investors to write large cheques to back his ambitions. Mubadala, one of the UAE’s sovereign wealth funds, and Saudi Arabia’s Public Investment Fund invested in SoftBank’s first $100bn Vision Fund in 2017.
Since its inception, the first Vision Fund has generated about $29bn in cumulative investment gains as of the end of June. The more recent Vision Fund 2, which is primarily backed by SoftBank and contains the OpenAI stake, has generated $20.5bn.
Son has used a combination of fundraising and borrowing, partially backed by SoftBank’s stake in chipmaker Arm and its own resources, to finance his investments. Last month SoftBank completed the largest junk bond offering on record, paying investors yields as high as 9.75 per cent to raise more than $11bn.
Any commitment from deep-pocketed Gulf investors would also come at a critical juncture for the AI boom, which has powered Wall Street stocks to record highs and ignited an investment frenzy.
Anthropic, the maker of Claude and OpenAI’s arch-rival, is expected to launch a potentially record-breaking IPO in coming weeks even as fears over the safety of the technology have intensified.
Son has dismissed sceptics of the technology, saying in July that “those who condemn AI are themselves spitting upwards”. More recently he admitted that if AI were used by “bad” actors it could “become super dangerous”.
OpenAI’s decision to delay an IPO, due to what both the company and competitors say are risks around the development of AI, could hurt SoftBank’s plans for new AI investments.
SoftBank’s share price is still up 25 per cent this year but has fallen more than 30 per cent since peaking in June, when it briefly became Japan’s most valuable company.
The stock fell 5 per cent on Friday after the FT reported that OpenAI’s annualised revenue was about $20bn lower than the company had signalled.
SoftBank’s ability to raise debt is linked to the existing valuations on its balance sheets, with net asset value standing at ¥72.3tn at the end of June.
Its loan-to-value ratio stood at 13 per cent at the end of June — well below the 25 per cent ceiling targeted during normal operations.
Senior SoftBank figures say short-term movements in the valuation of OpenAI or other large portfolio companies will not upset investment plans.
A fall in OpenAI’s valuation could be problematic, say analysts and others close to the company, as so much of SoftBank’s investments are linked either directly to the ChatGPT maker or AI more broadly. “A contagion effect . . . could get quite bad, quite quickly,” said one Asia-based analyst.
Additional reporting by Nicolas Parasie in Dubai and Arash Massoudi in London