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SoftBank Launching a $108 Billion Tech Fund That Will Invest in AI Development

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【Summary】​SoftBank Group Corp. officially announced today the planned establishment of “SoftBank Vision Fund 2", a new private investment fund and one of the largest of its kind. SoftBank has secured pledges from tech giants Microsoft and Apple, as well as other investors for about $108 billion for its second Vision Fund.

FutureCar Staff    Jul 26, 2019 1:50 PM PT
SoftBank Launching a $108 Billion Tech Fund That Will Invest in AI Development

SoftBank Group Corp. officially announced today the planned establishment of "SoftBank Vision Fund 2", a new private investment fund and one of the largest of its kind. The objective of the Fund is to facilitate the continued acceleration of the AI revolution through investment in "market-leading, tech-enabled growth companies."

SoftBank has secured pledges from Microsoft, Apple and other investors for about $108 billion for its second Vision Fund. SoftBank said it was still talking to potential investors and that it expected the fund's anticipated capital to grow.

Softbank itself plans to invest $38 billion in the fund, it said in a statement. Others set to join include, Foxconn, which build Apple's iPhone, and Japan's Mizuho Bank and MUFG Bank.

Vision Fund 2 will invest in disruptive and potentially market-reshaping technologies, such as artificial intelligence. 

"The objective of the fund is to facilitate the continued acceleration of the AI revolution through investment in market-leading, tech-enabled growth companies," SoftBank said in its statement.

SoftBank Chief executive Masayoshi Son uses artificial intelligence as a catch-all term to characterize the company's broad investment portfolio, which features businesses as varied as ride-hailing and autonomous driving, insurance and healthcare.

The original Vision Fund invested in some well known Silicon Valley companies, including mapping company Mapbox, food delivery company DoorDash, GM Cruise, the self-driving arm of General Motors, Nvidia and Uber.

Softbank is already the biggest investor in Uber. According to Uber's IPO filing documents with the U.S. Securities and Exchange Commission, Softbank owns 16.3% percent of the ride-hailing giant. Softbank's stake is now estimated to be worth double its initial investment of $7.7 billion.

Absent from the list of state and corporate backers for Softbank's new fund were the sovereign wealth funds of the two countries which formed the cornerstone of its first fund: Saudi Arabia and Abu Dhabi, as well as investment bank Goldman Sachs.

Saudi Arabia's Crown Prince Mohammed bin Salman told Bloomberg in October his country was ready to commit a further $45 billion through its Public Investment Fund (PIF), adding: "Without the PIF, there will be no SoftBank Vision Fund".

Softbank founder and Chief Executive Masayoshi Son defended its relationship after Saudi security personnel were accused of murdering Jamal Khashoggi, a journalist critical of the Saudi state.

Discussions between Softbank and PIF were ongoing, but the Saudis would wait for a formal proposal before deciding whether to invest in the new fund, a source familiar with the matter said.

A spokeswoman for Abu Dhabi's Mubadala said to Reuters it was still in the process of assessing a potential investment. The Wall Street Journal on Wednesday reported Goldman Sachs would invest in the fund.

The $108 billion Vision Fund 2 is close to the entire $131 billion venture capital investment in U.S.-based start-ups for 2018, according to the National Venture Capital Association.

resource from: Reuters

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