WeWork's CEO raised $4.4 billion from a Saudi-backed fund, but said going forward he'd consider declining investments on moral grounds
- The coworking-space giant WeWork has received around $14 billion from the Japanese holding company SoftBank.
- The initial SoftBank investment was from its Vision Fund, whose primary backer is the kingdom of Saudi Arabia.
- Silicon Valley began reconsidering its relationship with the Saudi government after the assassination of journalist Jamal Khashoggi last fall.
- Though WeWork CEO Adam Neumann did not say he would never accept money tied to the Saudis again, he did say he would not take further investments tied to a government he was morally opposed to.
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In much the same way that the United States has overlooked Saudi Arabia's human rights violations since President Franklin Roosevelt established a close strategic relationship with the kingdom, Silicon Valley seemed happy to ignore controversy for the sake of billions of dollars in funding.
It took the political assassination of the journalist Jamal Khasshogi, who contributed to the Washington Post, last October to force big tech companies to reconsider their ties to the ultraconservative kingdom. After the CIA determined that the Valley's benefactor, Crown Prince Mohammed bin-Salman, ordered the hit, several tech leaders pulled back on some of their ties.
Business Insider recently had an in-depth conversation with WeWork cofounder and CEO Adam Neumann, and we asked him whether he thinks Silicon Valley has a Saudi Arabia problem. He admitted to "hovering" around the question and would not directly comment on the kingdom, but said that going forward he would not accept money from a source he disagreed with morally.
Neumann began a relationship with SoftBank CEO Masayoshi Son in 2017 with a $4.4 billion investment from its $100 billion Vision Fund, whose primary funder is the Saudi government, which contributed $45 billion of that. Son has since invested around $10 billion more (Neumann said he invested $6 billion last December, not the widely reported $2 billion), but from outside of the Vision Fund, which Neumann was quick to point out.
"Only our first investment came from there," he said. "All of the follow-up investments that you know of are SoftBank investments, not the Vision Fund, which is just a fact with us."
He praised the general idea behind powers built on oil going in new directions, the way the Saudis have done. "Being an Israeli myself, my biggest wish is a direction towards peace," he said, adding that he supports any Middle Eastern country that is beginning to move beyond oil through investments in fast-growing technology companies.
He said that, however, without mentioning the Saudis by name:
"I think the world has a global problem of extremists, together with a huge shift in what different countries can allow their citizens to do or not. I think the only way we're going to solve it is if we come together and agree on a certain level of moral standards, that there are a few things and behaviors we don't accept no matter what.
"If that means we can't get money because of it, then I agree with you. But if we don't find a way to come together and see the best in each other and find ways to collaborate even if it's hard in the beginning, then I think things will only get worse."
Neumann said that he admired the way Uber allegedly lobbied for granting women the right to drive as part of its relationship with the Saudi government (cofounder and former CEO Travis Kalanick sits on the board of the kingdom's megacity project called Neom).
He said that he ideally wants the Valley to work with governments across the Middle East, and while he would not explicitly say he would never take Saudi money again, he told us that "global companies need to start taking a stand on what's right and wrong, not just for the sake of paying less taxes or getting in favor with the government of the country they want to enter; actually, for the sake of humanity."
Asked if that applied to his $47 billion coworking-space company, he said "100%."