SoftBank’s Son courts Gulf for $100B AI fund, FT says

SoftBank Group founder Masayoshi Son has been talking with Gulf investors, including some in the United Arab Emirates, about raising as much as $100 billion for a new fund. The fund would buy companies and rebuild how they operate around artificial intelligence, the Financial Times reported, citing people familiar with the talks. No commitments have been announced, and the FT said there is no guarantee the talks will produce a deal. SoftBank has not publicly confirmed the plan.thecfome+3

The proposal would be one of Son's largest fundraising efforts yet. It also comes as SoftBank's exposure to OpenAI has reached about $65 billion, which is raising questions about how much more the company can take on.enterpriseam+1

Buying companies, not backing labs

The FT reported that the money would go into a fund that acquires companies and then uses AI and other advanced technology to change how they work. SoftBank's AI and robotics unit Roze, which Son wants to take public, is expected to play a key role. The FT did not name any of the investors involved in the talks.bloomberg+2

The plan builds on SoftBank's long ties with the region. Abu Dhabi's Mubadala committed $15 billion to SoftBank's first Vision Fund in 2017, alongside Saudi Arabia's Public Investment Fund. More recently, Abu Dhabi's First Abu Dhabi Bank took nearly $1 billion of SoftBank's $40 billion OpenAI bridge loan in July, EnterpriseAM reported. Gulf investors are also already putting large sums into AI. Abu Dhabi's MGX closed a $49 billion fundraising round in July, beating its $45 billion target.enterpriseam

Doubts over AI spending

Commentators say the effort will add to concerns about an AI bubble. Bloomberg Opinion columnist Shuli Ren wrote that Son's attempt "will only give the doubters more ammunition." She noted that billionaire Ray Dalio recently warned the bubble was close to bursting, and that Michael Burry brought forward the timeline for his bearish view.bloomberg

SoftBank has paid for its OpenAI bet largely with borrowing. That includes the $40 billion bridge loan and a $10 billion margin loan backed by its OpenAI stake. Startup Fortune reported that SoftBank also raised $11.1 billion from a bond sale last month, which it described as the largest high-yield corporate bond sale on record. EnterpriseAM said OpenAI's postponed IPO adds to the uncertainty around SoftBank's investment plans.startupfortune+1

Son has dismissed worries about a bubble, calling the idea "blasphemy." He has predicted that global AI spending will reach $5 trillion a year by 2040. EnterpriseAM said the open question is whether Son "can persuade Gulf investors to write another round of big checks".enterpriseam+1