SoftBank Seeks Another $7B in Plan for World Tech Domination – Report

Japan's SoftBank is said to have met with investors in Canada and the Middle East about raising the final $7 billion for its $100 billion technology fund. (See Eurobites: Saudis Join SoftBank's Unicorn Hunt.)

Reports from Bloomberg indicate the company has been in talks with pension funds in Canada, sovereign wealth funds in Kuwait and Qatar and technology companies.

The additional capital would add to the $93 billion already raised -- see this announcement from May 22 -- to take the fund's total investment commitments to the $100 billion mark.

Shares in SoftBank Corp. closed up 1.56% in Tokyo earlier today on the latest reports.

Besides SoftBank, which has said it will commit a maximum of $28 billion to the so-called Vision Fund, existing investors include Apple Inc. (Nasdaq: AAPL), Qualcomm Inc. (Nasdaq: QCOM), Foxconn Electronics Inc. and wealth funds in Saudi Arabia and the United Arab Emirates.

Behind the ambitious scheme looms the figure of Masayoshi Son, SoftBank's founder and CEO, whose vision of a near future shaped by artificial intelligence and the Internet of Things guides his investment strategy.

Son has previously channeled investments through SoftBank but the company is today loaded with debt and derives most of its market value from its 28% stake in Alibaba, an ecommerce giant in China.

Owning a stake of only 19% in the business, Son cannot easily sell shares, and raise the cash he needs for additional investments, without seriously weakening his position.

The Vision Fund gets around those problems by keeping its activities off SoftBank's own books and by enlisting the support of other investors with very deep pockets.

Its investment activities are unlikely to be confined to one specific part of the technology sector: Son has previously dabbled in everything from online gaming companies to semiconductor firms.

Among other things, SoftBank has splashed about $32 billion on a takeover of UK chip designer ARM Ltd. and reportedly amassed a 4.9% stake in Nvidia Corp. (Nasdaq: NVDA), a maker of graphics processing units and an ARM customer. (See SoftBank Muscles In on ARM in $32B Deal.)

In March, SoftBank was said to have drawn up plans to sell a 25% stake in ARM to the newly created Vision Fund for a fee of about $8 billion. (See Eurobites: SoftBank to Sell Chunk of ARM to Saudi-Backed Fund.)

SoftBank also acquired US telco Sprint Corp. (NYSE: S) in a deal worth more than $20 billion back in 2012 and is currently thought to be eyeing a potential merger of that company with local rival T-Mobile US, whose biggest shareholder remains Germany's Deutsche Telekom AG (NYSE: DT). (See T-Mobile, Sprint Restart Merger Talks – Report.)

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But it is the Japanese company's moves in the semiconductor market that could make it a powerbroker in future.

ARM's processor designs are already used in most of today's smartphone devices and Son believes the company's technology will have a key role to play in the billions of devices that make up the Internet of Things. (See ARM Takes Security Smarts Into IoT.)

ARM is even making a few inroads into the data center market that is today dominated by semiconductor giant Intel Corp. (Nasdaq: INTC). (See Intel Bets Chips on Network Platforms Consolidation and Intel Eyes Fab 5G Future, Not Another Mobile Mess.)

SoftBank's stake in Nvidia, meanwhile, gives it part-ownership of another semiconductor company whose influence appears to be growing.

Analysts believe that Nvidia's graphics processing units are better at supporting artificial intelligence and virtual reality applications than Intel's more general-purpose central processing units, and could pose another threat to Intel as those technologies take off.

Notably, several of the Vision Fund's other investors are big names in the chip industry, including Apple, Qualcomm and the UAE's sovereign wealth fund, which owns semiconductor contract maker GlobalFoundries.

As the Vision Fund's manager, SoftBank now sits at the heart of it all.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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