Musk Says Only Fools Would Give Money to SoftBank
Elon Musk responded to reports that SoftBank plans to raise up to $100 billion from Gulf investors by saying: only fools would give them money. The Financial Times reported on Friday that SoftBank founder Masayoshi Son has been in talks with high-level officials, including those from the UAE, about this funding for a new round of AI investments. SoftBank declined to comment, and Reuters stated it could not verify the information at this time.
The reported use of the funds is to establish a fund, acquire companies, and then use AI and other advanced technologies to transform operations. Bloomberg added that the transformation would involve machines from SoftBank's robotics division, Roze. This is not a closed fund; it is still in early discussions.
The context of the same week is that SoftBank just completed a $30 billion investment in OpenAI, part of its commitment to the parent company of ChatGPT in the last round. Last month, SoftBank issued $11.1 billion in high-yield corporate bonds to fund this bet, which was noted as the largest high-yield corporate bond issuance globally. The new $100 billion, if finalized, would stack on top of this completed investment and the bond issuance.
The approach is old. The first Vision Fund reached $100 billion in 2017, with the Saudi Public Investment Fund and UAE's Mubadala as core investors. Son has returned to the Gulf for this round. Musk's response did not include any holdings or trades; he simply denied continuing to give money.
The public records of the Vision Fund include large losses from companies like WeWork, as well as projects that later recouped investments through public listings and reductions. The report did not provide details on the management fees, investment ratios, or SoftBank's own contributions for the new fund. If Gulf funds enter, they are buying into Son's plan for another platform acquisition and AI transformation.
This is a rumor-driven fundraising effort. The seller is SoftBank, looking to bolster its next round of AI bets, while the buyers named are Gulf sovereign funds and high-level officials. Beneficiaries would be companies that could be acquired and transformed if the fund is established, as well as OpenAI, which has already secured a $30 billion commitment; under pressure are investors from the previous Vision Fund whose returns did not meet expectations, and bondholders who just subscribed to the $11.1 billion high-yield bonds. Musk stands on the side of not giving money, and formal terms have yet to emerge.
Source: Public Information
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Masayoshi Son's fundraising template has already been run from 2016 to 2017. The Saudi Public Investment Fund contributed about $45 billion, with Mubadala co-investing, leading to the first Vision Fund reaching about $100 billion. The money went into Uber, WeWork, DoorDash, and Arm. WeWork's valuation plummeted from $47 billion to bankruptcy restructuring, serving as a cautionary tale for this fund; Arm later went public and became an asset for SoftBank to use as collateral and reduce holdings. The same Gulf investors are now being invited back to invest in AI.
This cash has already been spent. SoftBank completed a $30 billion investment in OpenAI and used $11.1 billion in high-yield bonds to fill gaps. Discussing $100 billion now shifts the leveraged gap to sovereign funds. The fund design is not to buy model equity again but to acquire companies and use AI and Roze's robots to transform operations. Money flows from Gulf balance sheets into acquisitions, then into SoftBank's transformation services.
A comparable instance is when SoftBank turned the internet boom into Japan's largest venture fund in 2000, and the Saudi Public Investment Fund created its own tool fund, no longer just acting as a limited partner. The difference is that in 2017, the Gulf wanted a ticket to Silicon Valley, while by 2026, they already have MGX and direct model investments. SoftBank is in a refinancing phase: the credibility of the old fund is still being valued by WeWork, while the new fund is still in negotiations.
The essence is capital concentration. The single round of model companies has grown large enough for an industrial group to complete through bond issuance, and the next layer of acquisitions requires sovereign scale. The mechanism is that Son uses "operational transformation" to frame the investment as industrial upgrading, while Musk, with a single word, calls the same money a repeated loss investment. The pricing power lies in whether the Gulf is still willing to act as limited partners, not in the response itself.
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The same group of investors will be invited back for a second time.
Debt has been issued, and the gap is now being sought from sovereign funds.
Lessons will remain on the books, and the template will be reused.