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AI-focused Softbank $108 bn mega-fund attracts Apple, Microsoft

Softbank, Vision fund

The mega-fund will be used to invest in tech ventures around the world

Japan’s SoftBank has announced a second technology mega-fund worth $108 billion to invest in tech ventures worldwide. Termed as Vision Fund 2, participants in the fund include the likes of Apple and Microsoft. SoftBank itself has pledged to invest $38 billion.

According to Softbank, 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 expects more potential investors to join in and the fund’s anticipated capital to grow. Investors such as Goldman Sachs are also in active talks to invest.

Other investors who have signed memorandums of understanding to participate areFoxconn, Mizuho Bank, MUFG Bank, Dai-ichi Life, Sumitomo Mitsui Trust Bank, SMBC Nikko Securities, Daiwa Securities group, National Investment Corporation of National Bank of Kazakhstan, and Standard Chartered Bank.

The fund is expected to take some time before it begins operations as talks with some of these companies are still at an early phase.

The first vision fund worth $98 billion was a game-changer. It changed the rules of venture capital and tech investing by investing billions into startups such as Uber and Didi Chuxing.

According to SoftBank, it has earned a return of 29 percent mostly on valuation gains in its holdings. The first vision fund was backed by mostly sovereign-wealth funds of Saudi Arabia and the United Arab Emirates. However, they are yet to commit for Vision Fund 2.

“Those investing two years ago were investing in the vision; there was no proof the concept was going to succeed. Given the track record achieved over the last two years Vision Fund 2 has been substantially de-risked,” Sanford C. Bernstein analyst Chris Lane told the media.

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