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Apple invests $1 billion in $100-B SoftBank technology fund

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By The Wall Street Journal

Apple, Inc. headlines a growing list of investors in SoftBank Group Corp.’s $100-billion technology fund, which is expected to include Foxconn Technology Group Ltd. and the family office of Oracle Corp. Chairman Larry Ellison, the Japanese telecommunications giant said Wednesday.

Apple separately said it plans to invest $1 billion in the Japanese telecom giant’s fund. “We believe their new fund will speed the development of technologies which may be strategically important to Apple,” said Apple spokeswoman Kristin Huguet. She added that Apple has worked with SoftBank for many years.

The trio joins a list of investors that includes Qualcomm, Inc. and Saudi Arabia’s government, which plans to invest $45 billion over a five-year period, SoftBank said Wednesday. SoftBank will invest $25 billion in its fund, it added.

Foxconn, known formally as Hon Hai Precision Industry Co., said it didn’t have any announcements regarding future investment plans. Oracle declined to comment on Mr. Ellison’s investment. A Qualcomm spokeswoman said it intends to invest, adding that terms and the amount are still under discussion.

The SoftBank Vision Fund plans to hold an initial close to its fundraising by the end of the month, with a final close expected in mid-2017, according to people familiar with the matter. SoftBank’s recent investment into US startup OneWeb Ltd., which aims to use satellites to bring internet access to rural areas, could be placed into the fund, the people said.

The fund brings together many competitors with overlapping business interests that stretch back years. In 2008, SoftBank struck a deal with Apple to become the exclusive iPhone seller in Japan. Those phones are mostly made by Foxconn and many include microchip technology that Qualcomm licenses from SoftBank-controlled ARM Holdings.

Apple’s $1-billion investment is unusual because the company doesn’t have a record of investing in venture-capital funds. It is the latest example of a changing investment strategy that last year included a $1-billion investment in Didi Chuxing Technology Co., China’s homegrown ride-sharing competitor to Uber Technologies, Inc.

SoftBank Chief Executive Masayoshi Son is creating the technology fund to help put his company and investors at the forefront of emerging technologies such as artificial intelligence and the Internet of Things, in which everyday objects such as thermostats, watches and cars are connected online.

While competitors such as Alphabet Inc. and Amazon.com Inc. have launched connected devices, Apple has largely stayed out of that arena. Its focus instead has been on the Apple Watch, a wearable device with some health-monitoring capabilities.

Joining SoftBank’s investment fund could help Apple as it looks to integrate new technologies into its devices or ensure its smartphones are compatible with connected products such as thermostats.

“Apple doesn’t want to sell a lot of the end nodes in the Internet of Things, but it does need to defend its core, smartphone business,” said Roger Kay, a market analyst with Endpoint Technologies Associates.

Mr. Kay said the investment also is about alliances. He said Apple has generally operated independently but is increasingly looking to partner with other companies, particularly in Asia.

Foxconn’s participation in the fund was telegraphed during a December meeting between President-elect Donald Trump and Mr. Son, who is close with Foxconn head Terry Gou. Speaking with reporters that day, Mr. Son held a piece of paper with the logos of Foxconn and SoftBank alongside each other.

In 2015, Foxconn invested $118 million in SoftBank’s robotics venture and began producing a robot called Pepper that is billed as the first robot capable of understanding human emotions.

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