SoftBank plans to raise $100 billion from Gulf investors as it ramps up its AI bet.

SoftBank founder Masayoshi Son is seeking to raise up to $100 billion from Gulf investors to further bet on the artificial intelligence sector. This move would be one of the Japanese billionaire's largest AI fundraising efforts to date.

According to the Financial Times on the 9th, citing multiple sources familiar with the matter, Masayoshi Son has been in talks in recent weeks with senior figures in the Gulf region, including the UAE, regarding the potential financing. The funds raised will reportedly be used to establish a fund to acquire companies and improve their operations using AI and other advanced technologies. SoftBank's robotics and physical AI business, Roze, is expected to play a key role in this process. The sources also emphasized that there is no guarantee of success in negotiations with Gulf investors.

This financing plan comes at a time when SoftBank is facing multiple pressures: OpenAI has postponed its IPO, market concerns about SoftBank's excessive exposure to AI continue to grow, and SoftBank's stock price has cumulatively fallen by more than 30% from its June peak. At the same time, the above news also injects new variables into the AI investment boom at a critical juncture.

Masayoshi Son knocks on the door of the Gulf again

This financing round is not the first time Masayoshi Son has sought substantial support from the Gulf region. In 2017, both the UAE's sovereign wealth fund Mubadala and Saudi Arabia's Public Investment Fund (PIF) participated in SoftBank's first Vision Fund, which reached $100 billion. As of the end of June this year, Vision Fund I had accumulated investment returns of approximately $29 billion; Vision Fund II, with SoftBank's own funds as the main contributor and holding shares in OpenAI, recorded returns of $20.5 billion.

In recent years, Gulf states have been allocating significant wealth to the AI sector in an effort to reduce their economic dependence on energy. Abu Dhabi, through platforms such as the AI-focused fund MGX and AI holding company G42, has become one of the world's largest investors in the AI field. Neither of these companies responded to requests for comment, and SoftBank also declined to comment.

The AI gamble continues to escalate.

This funding round is a continuation of Masayoshi Son's series of aggressive AI bets. The most notable of these is his $65 billion investment in OpenAI, the developer of ChatGPT. To support these investments, Son has employed a combination of financing and debt financing, using SoftBank's stake in chip design company Arm and its own resources as partial collateral. Last month, SoftBank completed its largest-ever junk bond issuance, raising over $11 billion from investors at yields as high as 9.75%.

SoftBank executives stated that short-term valuation fluctuations in major portfolio companies such as OpenAI will not affect the company's investment plans. As of the end of June, SoftBank's net asset value was ¥72.3 trillion, with a loan-to-value ratio of 13%, well below the 25% ceiling target for normal operations.

Risks are lurking beneath the surface.

Despite the massive scale of the bet, external risks are accumulating. According to the Financial Times, OpenAI's annualized revenue is approximately $20 billion lower than previously indicated, causing SoftBank's stock price to fall 5% in a single day after the announcement. Year-to-date, SoftBank's stock price has still risen by about 25%, but it has fallen by more than 30% from its peak in June when it briefly became Japan's most valuable company.

Analysts believe that OpenAI's delayed IPO could dampen SoftBank's plans for further AI investments. One analyst based in Asia warned that "the ripple effects...could worsen rapidly in a short period"—because SoftBank's substantial investments are directly or indirectly linked to OpenAI and the AI sector, and the consequences of a significant decline in OpenAI's valuation should not be underestimated.

Masayoshi Son has taken a tough stance against skeptics, stating in July that "those who condemn AI are spitting at the sky." However, he recently admitted that if AI is exploited by "bad guys," it "could become extremely dangerous." From WeWork's bankruptcy to Alibaba's phenomenal returns, Son's investment style has always been controversial, and this time, the market is closely watching whether he can once again turn a high-stakes gamble into a strategic victory.

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