Venture: SoftBank CEO Committed To Vision Fund After Khashoggi's Assassination

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On Oct. 2, Jamal Khahsoggi, the most prominent and vocal critic of Saudi Arabia’s royal family, entered the Saudi Arabian consulate in Istanbul and never left. He was later found assassinated inside the consulate and although Saudi officials denied the assassination and claimed that he had already left the consulate, the Turkish government released a video recording of his killing and contained evidence that the Saudi Royal Family was behind the assassination.

The assassination of Khasoggi sent shockwaves throughout the world, particularly in the U.S. as Saudi Arabia is the country’s main ally in the fight against terrorism within the Middle East. Khashoggi had already been in the Saudi government’s blacklist since September 2017 when he relocated to the United States and began writing for The Washington Post. In years past when he was the leading progressive voice in Saudi society, he fiercely criticized Saudi Arabia’s harsh laws and the iron-fisted regime of Crown Prince Mohammad bin Salman and King Salman.

Saudi investment has contributed vast amounts of dollars into the budgets of the most prestigious technological and financial firms in the world, with Japanese multinational holding conglomerate, SoftBank Group, being one of them. SoftBank CEO Masatoshi Son had unveiled the Vision Fund, an investment fund which was established to provide investment for technological businesses, alongside Saudi-based Public Investment Fund.

Son finally broke his silence over the assassination of Khashoggi by stating that SoftBank has no clear understanding over the death of the prominent journalist and that the firm would like to be “careful watching the outcome”. Since the death of Khashoggi, Son hasn’t heard from any companies that want to accept investments from the Vision Fund due to its ties with the Public Investment Fund and that he has also met with King Salman, expressing his concerns about the incident.

By May 2017, SoftBank raised $93 billion, out of a planned $100 billion, on tech firms worldwide and the list of investors besides the Public Investment Fund include Qualcomm, Foxconn, and Sharp. SoftBank is also invested directly in a number of firms and has an option to buy the investments in firms such as ARM Holdings, SoFi, and Nauto.

Although Son has condemned the murder of Khashoggi and wants those who were responsible to be held accountable, he has also affirmed his commitment to not discard SoftBank’s ties to Saudi Arabia, particularly its ties to the Public Investment Fund, and that it’ll still invest Saudi money. The murder of Khashoggi led to many investors and global financial leaders to cancel their attendance at a finance conference in the Saudi capital of Riyadh, especially SoftBank-backed CEOs like Uber’s Dara Khosrowshahi.

Silicon Valley has already declared its disappointment with Saudi Arabia and its ties to the assassination of Khashoggi with former AOL executive Steve Case declaring that he would not attend the aforementioned finance conference in Riyadh called, ‘Davos in the Desert’. Sam Altman, head of the Y Combinator incubator, has suspended work in advising the Saudi government with developing a ‘smart city’ called Neom and a leading venture capitalist had recently been approached by Saudi financiers who were seeking to invest hundreds of millions of dollars and it took the assassination of Khashoggi to help him make his decision and reject the investments.

Virgin Group founder Richard Branson has also halted talks with Saudi Arabia following the assassination over a proposed $1 billion investment in Virgin’s space companies, including Virgin Galactic, which focuses on space tourism, and Virgin Orbit, which aims to launch small satellites into space. As a result, Branson has also stepped down from his role as director of two Saudi tourism projects that are aimed to transform Red Sea islands into luxury resorts.

Half of SoftBank’s Vision Fund investment comes from Saudi Arabia the fund has invested in various tech firms, solar projects and artificial intelligence and Son has declared that the fund’s work is work that is “yet to be finished” even though he still condemns the killing. In March 2018, SoftBank and the Saudi delegation backed by King Salman had signed a memorandum in New York that allows SoftBank to invest up to $200 billion in solar power development in Saudi Arabia.

A couple weeks after Khashoggi’s assassination, SoftBank’s share price had dropped to 7 percent and financial analysts blamed the share price drop on the assassination and according to Ray Wang from Constellation Research, there is now a “massive backlash” on tech companies and investors who continue receiving funds from Saudi Arabia. Saudi Crown Prince Mohammed Bin Salman has stated in the past that the Vision Fund backing was a way to diversify Saudi Arabia’s oil-centric economy, especially since it was reported that a second Vision Fund may be created as the Saudis were prepared to invest another $45 billion in it.

The killing of Jamal Khashoggi has not only affected financial investments and political relations but it is also seen as an attack on free speech and the rights of journalists to be open in covering news that can be seen as “controversial” in certain countries like Saudi Arabia. President Trump has vowed that Saudi Arabia will face “severe punishment” if the assassination’s evidence proves that the Royal Family was directly involved in it and Saudi media mentioned that sanctions on Saudi Arabia would “create an economic disaster that would rock the entire world.”