Softbank anxiously monitoring Saudi Arabia situation -executive

By Stephen Nellis

SAN JOSE, Calif – Softbank Group Chief Operating Officer Marcelo Claure said on Tuesday it is “business at usual” at companies backed by its nearly $100 billion Vision Fund despite a tense situation with Saudi Arabia, which provided nearly half of the fund’s capital.

Claure spoke at a technology conference in San Jose, California for British chip design firm Arm Holdings, which was acquired by the Vision Fund in 2016 for $32 billion. Claure said Softbank is “anxiously looking at what is happening” regarding the fate of journalist Jamal Khashoggi, who disappeared after entering the Saudi consulate in Istanbul last week.

“We, like most parties in the world, are watching events unfold,” Claure said. “We are just monitoring.”

Softbank’s $93 billion vision fund has become one of the primary funding vehicles for technology companies around the world. Saudi Arabia provided $45 billion for the fund, and unease over Softbank’s ties to the kingdom dragged down its shares earlier this week.

Softbank is also raising a second $100 billion Vision Fund. Earlier this month, Saudi Crown Price Mohammed bin Salman told Bloomberg that the country’s Public Investment Fund would contribute $45 billion to the second Vision Fund. Claure declined to comment to reporters on whether Softbank would accept the capital if it were offered.

“There’s no certainty,” he said. “We don’t have a date” for the closing of the second Vision Fund, he said.

Arm was the first Vision Fund’s largest deal to date for Softbank Chief Executive Masayoshi Son. The British chip design firm licenses its technology to chipmakers such as Qualcomm Inc and phone makers such as Apple Inc to power mobile devices and other technologies. The companies’ chip designs have begun working their way into data centers, where they compete with Intel Corp.

Arm Chief Executive Simon Segars said the company has been able to expand rapidly under Softbank’s ownership, hiring 2,000 people in the past two years for a total of 6,000 employees.

He said Arm was still profitable but less so than when it was a public company and was working with other Softbank Vision Fund Firms, for example by striking a deal with Softbank-backed Sprint Corp around so-called internet of things technology.

“That saves Sprint from engineering something very similar to what we already had. That lets us both go faster,” Segars said. (Reporting by Stephen Nellis; editing by Jonathan Oatis and Dan Grebler)

(Reuters)