SoftBank suddenly has a major problem on its hands as more details emerge about the Saudi kingdom's role in the death of Saudi journalist Jamal Khashoggi.
The largest investor in SoftBank's $100 billion Vision Fund, which is transforming Silicon Valley's start-up economy, is Saudi Arabia's Public Investment Fund (PIF). The PIF committed $45 billion to SoftBank's inaugural fund and said earlier this month that it plans to put about the same amount into a second fund.
But following the Khashoggi killing, which has captured headlines across the globe, SoftBank CEO Masayoshi Son is weighing his options.
"Like most companies that have a relationship with Saudi Arabia, we are watching the developments and seeing where this goes," Marcelo Claure, SoftBank's chief operating officer, told reporters during a contentious question and answer session last week at Arm TechCon's 2018 Roundtable. "We are anxiously looking at what is happening with the news, like everybody else is, and I think it's too early for us to have a judgment on it."
At the time of Claure's comments, Saudi Arabia hadn't yet settled on an explanation about how Khashoggi died inside the Saudi Consulate in Istanbul, even suggesting at one point that The Washington Post journalist left the building alive. Since then, the kingdom, under the de facto leadership of Crown Prince Mohammed bin Salman, has acknowledged Khashoggi was killed by Saudis inside the consulate.
Claure took a mostly symbolic step, following the lead of numerous top U.S. business executives, in pulling out of this week's Saudi Arabia's investment conference, Bloomberg reported on Monday, citing a person familiar with the matter. The New York Times reported Tuesday that Son will also skip the three-day conference, which is scheduled to end Thursday.
The harder part for Tokyo-based SoftBank is what to do if Son decides to no longer invest Saudi money or if companies start rejecting Vision Fund financing because of its backers.