SoftBank’s $93 Billion Vision Problem

Nearly two decades ago, SoftBank founder Masayoshi Son stunned his peers when he made a $20 million bet on then-unknown Alibaba. Today, his stake in the online marketplace is valued at $90 billion. Fueled by that outsize success, he is taking an even bigger gamble—with much higher risks—as he launches the world’s biggest-ever private equity fund.

Mr. Son has recruited the sovereign wealth funds of Saudi Arabia and the United Arab Emirates, nations desperate to diversify their oil-dependent economies, to back the Vision Fund, his tech-focused $93 billion private equity pool. Google, Apple, Qualcomm, Sharp and Foxconn are investors, too. Even with this substantial backing, the fund’s enormous size, on top of SoftBank’s already heavy debt load, raises questions about how this much capital can be effectively deployed.

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“He will suck the oxygen out of the room, which Masa is very, very good at,” said Mr. Tam. The sheer size of his check can serve to scare away competitors. “All other VCs will do the calculation and say you better not mess with Masa.”

—Juro Osawa and Alfred Lee contributed to this article.

Shawn Wang and Shai Oster commented on this article.
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“That’s too much money, too fast. The technology grows exponentially. But it’s managed by humans—and we’re linear.”