Business opportunity in Saudi Arabia in doubt

As the number one oil exporter, Saudi Arabia has earmarked $1.4 trillion for domestic infrastructure spending. But with Crown Prince Mohammed bin Salman facing global scrutiny, the risk is starting to outweigh the reward. CNN's John Defterios reports.

Posted: Oct 24, 2018 4:32 AM
Updated: Oct 24, 2018 5:04 AM

Masayoshi Son, the tech tycoon who has spent billions of Saudi money, is staying away from the kingdom's major investment summit this week.

The founder and CEO of Japanese tech company SoftBank (SFTBY) won't attend the Future Investment Initiative in Riyadh, a person familiar with the matter told CNN on Wednesday.

Dozens of other top business leaders have canceled plans to take part in the event, which is widely known as "Davos in the desert," following international uproar over the killing of Saudi journalist Jamal Khashoggi.

But Son's ties to the kingdom and its de facto leader, Crown Prince Mohammad bin Salman, are particularly strong. Over the past few years, he has become Saudi Arabia's most important partner in the tech world.

Son was the star guest at the conference last year, sitting alongside the prince at the glitzy Ritz-Carlton hotel in Riyadh. When bin Salman made a brief appearance at this year's event on Tuesday, Son was nowhere to be seen. A front row seat reserved for him was empty.

SoftBank declined to comment on his absence.

Son and his chief operating officer, Marcelo Claure, were both named as speakers by the Future Investment Initiative before a host of top names began canceling plans to attend.

Neither are now listed as speakers, although Son is mentioned as a member of the conference's advisory panel.

The company was represented on a panel at the event Tuesday by a lower-ranking executive, Saleh Romeih, a managing partner at SoftBank Investment Advisers.

The exodus of executives from the Saudi conference — including the CEOs of JPMorgan Chase (JPM), Uber and Siemens (SIEGY) — has dealt a big blow to the event. The gathering is part of efforts by bin Salman to transform the country's economy and shake off its reliance on oil.

Son has positioned himself as a key player in those plans, persuading bin Salman to provide $45 billion for a giant tech fund and committing SoftBank to help with some of Saudi Arabia's showcase projects.

The CEO used Saudi Arabia's oil riches to help him become one of the world's most powerful tech investors.

The kingdom provided nearly half the money for SoftBank's $93 billion tech-focused Vision Fund, which has made big investments in startups such as WeWork and Slack.

One of the Vision Fund's managing partners, Saleh Romeih, took part in the conference on Tuesday. He said the fund had recently opened offices in Saudi Arabia and the United Arab Emirates.

SoftBank has also promised to help the Saudi crown prince in his efforts to shift the country's oil-dependent economy toward new industries such as technology and renewable energy.

The Japanese company is involved in Saudi projects to build a new mega city and the world's largest solar farm.

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