Apple brought society the iPad, iPod and iPhone, not to mention several high-tech models of desktop and laptop computers. If you’ve ever used Apple’s equipment, it’s probably clear the company prides itself of being on the cutting-edge of technology’s capabilities. Recently, the company announced a one-billion-dollar investment that could help it nurture technology in other ways.
Pouring Funds Into SoftBank’s Vision Fund
You may know SoftBank as a Japanese phone company that owns Sprint. What you might not realize is that the company has also established a Vision Fund, which helps finance startup ventures. Apple has pledged to invest $1 billion into it. But why was the Vision Fund the apple of Apple’s eye?
Michael Gelband’s Exodus Point launched in 2018 with $8.5 billion in assets. Expectations were high that the former Millennium Management executive would be able to take the skills he had learned at Izzy Englander’s hedge fund and replicate its performance, after a decade of running its fixed income business. The fund looks to be proving Read More
According to a spokesperson for Apple, SoftBank will likely use some of the funding to speed the development of “smart” technologies and the Internet of Things. Deep learning and artificial intelligence have also been tapped as areas of focus for the Vision Fund.
So far, Apple hasn’t staked major claims in the first two areas. Analysts say Apple’s investment may support its own strategies by promoting the development of new technologies the company itself could eventually use.
What Else Might Be in Store for Apple?
By looking historically at how some of Apple’s most well-known technologies came to be, it’s easy to see why the company’s investment in the Vision Fund makes even more sense. iTunes, Apple Maps and Siri are examples of Apple technologies that sprung up from acquisitions. Theoretically, if a company associated with the Vision Fund impresses Apple enough, the tech giant might buy it out.
Even if that doesn’t happen, tech experts think 2017 will be a year when Apple gets involved in some major acquisitions. Everything’s still pure speculation for now, but Netflix and Spotify are two names that have been brought up as possible companies Apple may buy if opportunities present themselves. If that holds true, it seems likely AAPL wants to assert itself in the streaming media realm, and not just the aforementioned areas SoftBank will target with its fund.
SoftBank’s Leader Reached out to President-Elect Trump
Just before the holiday season, news broke that SoftBank hoped to build the largest private equity fund in the world and was looking for investment partners. Apple was one, but reportedly, SoftBank seeks a total of $100 billion, to go toward worldwide technology development.
In October, two founding partners from the Public Investment Fund of the Kingdom of Saudi Arabia agreed to give $70 billion over five years. At that time, they also wanted to find $30 billion more from outside sources.
We now know that AAPL’s one-billion-dollar contribution is set in stone, but before it was, Masayoshi Son, the head of SoftBank contacted President-elect Donald Trump. Son discussed creating 50,000 new job opportunities in the United States courtesy of assets from the Vision Fund and offered to funnel $50 billion into the American economy if Trump agreed to an undisclosed deal. Regulators appointed under the Obama Administration barred such an agreement from taking place, however.
Vision Fund to Be the Technology Sector’s Biggest Investor
Besides the possibility that Apple might help finance some new technologies it may use in its products someday, there’s another reason why Apple might have decided to put $1 billion into the Vision Fund: bragging rights.
Over the next half decade, Vision Fund will be the biggest investor in the technology sector and contribute at least $25 billion to it. If an amazing new technology hits the mainstream after it was financed via the Vision Fund, Apple could assert that it was instrumental in making that happen by investing its money in meaningful ways.
It’ll be interesting how SoftBank’s Vision Fund puts AAPL’s money to work. For now, we can wait in great anticipation, knowing there’s a good chance some of the technologies under development may change our lives.
Article by Kayla Matthews – Writer, researcher, blogger covering productivity, innovation and tech. Find her work on @inc, @makeuseof, @motherboard and @huffingtonpost