Softbank to sell 25% of ARM to its own fund, to attract more Arab money

Softbank is planning to sell 25% of ARM, its processor IP subsidiary, to a new Saudi Arabian-backed $100bn investment fund, Mubadala. The stake should be worth about worth about $8bn – the Japanese operator paid $32bn for ARM about six months ago.

Not long after the ARM deal, Softbank announced an ambitious plan to set up the Softbank Vision Fund to help its CEO, Masayoshi Son, invest more easily in technology projects worldwide. Son was a big hit at Mobile World Congress with his futuristic views on a future driven by 5G, robotics, AI and ‘super-intelligence’.

But turning such ideas from slideware into reality takes large amounts of money – more than Softbank, or ARM (a strategic element in Son’s technology vision), can easily access directly. So, while Softbank plans to inject $25bn into the $100bn Fund over the next five years, its largest backer is the Saudi Public Investment Fund, which has committed up to $45bn.

Now, Son is reported to be close to securing investment from Mubadala, an Abu Dhabi state-backed group, which already owns GlobalFoundries. The organization is reported to be close to a deal to commit $15bn to the Vision Fund, on condition that the fund owns part of ARM. By selling some of its stake in ARM to its fund, Softbank would cover some of its own four-year commitment too.

Other companies, reportedly including Apple, Qualcomm, Oracle founder Larry Ellison and Foxconn, are said to be ready to inject smaller sums into the huge fund, which the Financial Times says is “equal to all the money raised by the US venture capital industry in the past 30 months”.