SoftBank introduces its second tech megafund

This is SoftBank's second Vision Fund. (Getty Images)

The Japanese corporation SoftBank Group said that it plans to establish a new SoftBank Vision Fund. This is the second such private investment fund that SoftBank has introduced, and its goal is to help hasten the adoption of artificial intelligence (AI) with investment in companies at the forefront of that technology.

Based on MOUs that it has received, the company said that the total amount of capital that it expects to see contributed to the fund has reached about $108 billion, an amount that it also expects to increase.

The companies that have executed MOUs thus far and are expected to participate include Apple, Foxconn and Microsoft. According to the Wall Street Journal, roughly $38 billion of the initial funds will come from SoftBank itself, with capital from the company’s prior Vision Fund, which was founded two years ago.

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SoftBank is currently in discussions with Goldman Sachs Group to court its investment, and the Wall Street Journal said that some of the companies with which SoftBank is negotiating are still in the early stages. However, at $98.6 billion, the first Vision Fund had already distinguished itself as much larger than any other. This is especially true of the tech sector, in which funds have tended to be much smaller.

Part of the reason for the first Vision Fund’s large size was its requirement that entities invest no less than $100 million. Two of the investors, Apple and Foxconn, have pledged money to the second fund, which suggests that they believe their first investment was worth it.

Additionally, SoftBank is expected to secure further financing for the new fund from the planned merger between T-Mobile US and Sprint, the latter of which SoftBank controls. Today, the U.S. Department of Justice cleared federal objections to the merger, which some states still are attempting to block.

RELATED: DOJ officially signs off on T-Mobile-Sprint merger

Provided the merger moves forward, it would also have the effect of giving SoftBank a minority stake in the new entity, and take Sprint’s debt of $40 billion off of the company’s hands.

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