SoftBank's-AI

The AI Vision of SoftBank the Difficulties and Shortcomings in Competing with the iPhone

SoftBank Group announced today that it will form its second Vision Fund, including participation from Apple, Foxconn, Microsoft, and other technology businesses and investors. The Vision Fund 2 will focus on AI-based technology. Based on memorandums of understanding, SoftBank estimated the fund's capital to be around $108 billion. SoftBank Group will invest $38 billion in the fund.

It is worth noting that the second Vision Fund's list of expected limited partners currently does not include any participants from the Saudi Arabia government (the first Vision Fund's close ties to people, including Crown Prince Mohammed bin Salman, who have been implicated in the murder of journalist Jamal Khashoggi have understandably been a major source of concern for investors, companies, and human rights activists).

However, SoftBank Group stated that it is still in conversations with other members and that the total value of the fund is expected to expand. The complete list of companies that have signed memorandums of understanding thus far includes "Apple, Foxconn Technology Group, Microsoft Corporation, Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd., The Dai-ichi Life Insurance Company, Limited, Sumitomo Mitsui Trust Bank, Limited, SMBC Nikko Securities Inc., Daiwa Securities Group Inc., National Investment Corporation of National Bank of Kazakhstan, Standard Chartered Bank, and major participants from Taiwan."

The Wall Street Journal originally revealed SoftBank's intention to launch Vision Fund 2 earlier this week. The new fund is expected to reduce SoftBank's reliance on Saudi Arabian funding while also potentially altering the interaction between startups, corporate behemoths such as Microsoft, and investors.

The second Vision Fund might help SoftBank maintain its status as the world's most powerful investor. The company invested in dozens of high-profile growth startups through its initial $97 billion Vision Fund, including ride-hailing heavyweights Didi Chuxing and Grab, as well as India-based food delivery startup Grofers, payments firm Paytm, and cheap lodging startup Oyo.

SoftBank reported this month that the first Vision Fund, which was introduced in October 2016 and began investing in early 2017, has produced 62% returns to date. According to research firm CB Insights, SoftBank has invested in 24 of 377 unicorns globally (businesses with a valuation of $1 billion or more).