Half of SoftBank's London-based $100 billion tech fund will be used to back US startups

Masayoshi Son SoftBank Koki Nagahama/Getty ImagesMasayoshi Son, chairman and chief executive officer of SoftBank Corp speaks during the news conference on June 18, 2015 in Chiba, Japan.

Japanese tech giant SoftBank is planning to invest $50 billion (£40 billion) in US startups.

The money will come from a $100 billion (£79 billion) London-based fund, Bloomberg reports, citing a source that is said to be familiar with the matter.

Masayoshi Son, the CEO and chairman of Japanese tech giant SoftBank, told President-elect Donald Trump that he will create 50,000 new jobs in the US as a result of his investment activities in the country.

Billionaires Trump and Son met on Tuesday and were photographed smiling with their arms around one another.

The “SoftBank Vision Fund” was announced by SoftBank in October as a joint partnership between the Tokyo-headquartered company and the government of Saudi Arabia. The $100 billion fund will be made up with $45 billion (£37 billion) from Saudi Arabia, $25 billion (£20 billion) from SoftBank, and $35 billion (£28 billion) from other global investors.

SoftBank, which operates technology and telecommunications companies worldwide, said the fund would be the “largest of its kind” and that it would be used to make investments in new technology companies from an office in London.

SoftBank, which recently agreed to spend $32 billion (£26 billion) on UK chip designer ARM, is already heavily invested in the US. In 2013, the company paid $22 billion for a controlling stake in US telco Sprint in 2013. However, that investment has lost around $7 billion (£6 billion) of its value as Sprint has lost market share to rival firms, according to the BBC.

In a bid to recapture some of that ground, SoftBank tried to buy T-Mobile, Sprint’s largest rival in the US, but the deal was blocked by US regulators.

Making friends with Trump early on could make it easier for SoftBank to sign large telco deals in the US in the future.

While Japan has a reputation for building huge hardware companies such as Sony, Panasonic and Olympus, the country has lost out to America’s Silicon Valley in recent decades as relatively new software companies like Google, Facebook, and Uber have become some of the world’s largest tech firms by market cap.

It seems likely that Son wants to ensure he is heavily invested in the next generation of successful tech firms spinning out of the US.

Commenting on the relationship between Son and Trump, Marc Einstein at research firm Frost & Sullivan told the BBC: “They’re both billionaires, they’re both mavericks and they’re both gamblers.”

Einstein added: “I can see them sitting down and having a positive discussion.”

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