One year ago, the global business elite deserted a Saudi Arabian investment summit in droves after the killing of journalist Jamal Khashoggi by Saudi agents. But the founder of Japan’s SoftBank slipped into Riyadh for a discreet meeting.

Masayoshi Son and his chief lieutenant, Rajeev Misra, were there to see Mohammed bin Salman, the crown prince who had helped to make them the world’s most influential technology investors. Almost half of SoftBank’s $97-billion technology-focused Vision Fund — the biggest pool of private money ever raised — came from the young royal’s sovereign wealth fund.

Their message for Prince Mohammed was clear: SoftBank, they said, would not abandon him, people briefed on the conversation told the Financial Times. The crown prince pledged never to forget their loyalty.

One year later the strength of those bonds is being tested and plans for a long-awaited sequel to the Vision Fund are in serious doubt.

Armed with Gulf capital, SoftBank poured into every corner of the digital economy and fueled some of the world’s most richly valued private companies. Following Son’s advice, many burned cash in feverish pursuit of scale and market share above all else.

But the near-collapse of SoftBank’s biggest gamble, co-working group WeWork, and the plummeting valuation of its other holdings have dramatically shaken faith in Son’s investment genius and his bets on disruptive technology.

If the troubles at SoftBank and its Vision Fund escalate into a crisis, as some fear, it would resonate from Silicon Valley, Beijing and Mumbai, India, to the financial centers of the City of London, Wall Street and Tokyo.

Returning to Riyadh in late October for the latest Future Investment Initiative, known as “Davos in the Desert,” Son was met by an almost-empty room for his panel discussion. The weary-looking billionaire, who at one point appeared to fall asleep, insisted he would keep offering capital to startups so they could “grow much bigger and quicker.”

“We identify the entrepreneurs who have the greatest vision to solve the unsolvable,” he said. “They need to have the strongest passion. And then we provide the cash to fight.”

The downfall of WeWork has been a humbling experience. “It’s been embarrassing for him,” says a person who works closely with Son. “He has to rethink his approach.”

SoftBank shares have plummeted more than 25% in the past three months. On Wednesday, the company reported a $6.5-billion quarterly loss and wrote down the value of several investments. That included a $4.6-billion charge for WeWork.

The struggles have laid bare a sharp-elbowed culture within the Vision Fund, which is led by Misra and seen as rife with mistrust, managerial disorganization and clashes between executives.

Despite efforts at scaling and maturing its investment arm, SoftBank has been unable to shake off a “Wild West” culture at the London-based fund, where power struggles have contributed to high-level departures, including Mark Schwartz, the company’s longtime independent director.

Uber’s May 10 IPO was supposed to be a coming-of-age moment for a Silicon Valley “unicorn.” Instead, it turned into a rude awakening about the public market’s attitude to loss-making startups, which the Vision Fund had loaded up on.

Uber is now down about 30% from its listing price, with the Vision Fund sitting on more than $800 million in paper losses. Other investments have suffered too: office messaging group Slack has dropped nearly 45% since its first day of trading in June, while Vir Biotechnology has fallen 30% since its mid-October listing. Only two Vision Fund-backed companies, Guardant Health and 10X Genomics, are trading above their IPO price.

“If SoftBank says this is the value, how much of that should you believe?” says Kirk Boodry, a tech analyst at Redex Holdings who publishes on research platform Smartkarma. One hedge fund investor says backing from the Vision Fund is “an immediate cue to sell.”

The steady procession of IPOs was intended to validate the Vision Fund’s late-stage bets and lay the groundwork for juicy returns that would make big-money investors clamor to pour money into its next Vision Fund. The group would look to list at least two portfolio companies per month by 2020, Misra said earlier this year.

Suddenly, with the wisdom of that model in question, support from the rest of the market is not a given.

The biggest blow, however, came from a company whose founder Son has praised and lavished with billions of dollars since 2017, saying it would be worth a few hundred billion one day.

The close bond between Son and WeWork founder Adam Neumann had begun to sour long before its disastrous attempt to list in September. The turning point came late last year.

Teams from SoftBank and WeWork had been toiling in secret since Thanksgiving on an audacious plan they called Project Fortitude, which would have seen SoftBank and the fund buying out every WeWork shareholder except Neumann for $10 billion and injecting a total of $10 billion into the company.

As the negotiators broke up for the Christmas holidays, however, Son called Neumann to say they would have to rethink: The Vision Fund had backed out, and with SoftBank’s own shares falling he would ultimately commit just $2 billion of additional capital in January. In theory, the new deal pumped WeWork’s valuation up to $47 billion. But the company’s rapid cash burn meant it would need to hasten plans for an IPO.

Months later WeWork ditched its IPO plans after failing to fetch even a $15-billion valuation from investors. The shelved IPO led to a $9.5-billion rescue package from SoftBank to save the business. The deal valued WeWork at just $8 billion, although Neumann, whose special voting rights gave him the leverage, negotiated a controversial $1.7-billion exit package even as 4,000 WeWork employees are to be fired.

“We created a monster,” Son has told colleagues. “We gave him all the capital.”

There are concerns about other privately held companies in the Vision Fund portfolio. One company that has raised eyebrows is India’s Oyo, in which the Vision Fund owns a 50% stake. The hotel chain’s most recent $2-billion investment round was led by Ritesh Agarwal, Oyo’s 25-year-old founder, in an unusual deal that doubled its valuation to $10 billion and saw him tap into loans from Japanese banks with close ties to SoftBank.

Concerns about passenger safety at Didi Chuxing, China’s answer to Uber, have held back its growth in the last year. Other bets are not expected to generate any returns. Fair, the car subscription startup that partners with Uber, recently revealed plans to cut 40% of its workforce as it struggles to become profitable. Wag, the dog-walking company backed by a $300-million Vision Fund check, has been earmarked for sale.

“Money in the right hands, right founders and right potential long-term platforms works,” said Nikesh Arora, Son’s former heir apparent, who abruptly resigned in 2016, at a CNBC event recently. “But it doesn’t work willy-nilly on every pet-walking and hotel room-renting website.”

It is hard to formulate a cohesive picture of SoftBank and the Vision Fund, in part because of Son’s incessant deal-making, and also because of the extreme levels of financial engineering employed by Misra.

“SoftBank and the Vision Fund are layers of leverage upon leverage,” says one banker who has worked closely with both.

SoftBank is saddled with $160 billion of interest-bearing debt and its bonds are rated non-investment grade. The Vision Fund has a unique structure — created by Misra — where roughly $40 billion of outside investor funds are in the form of preferred shares that work like debt and pay an annual coupon.

When Misra looked to return capital to the Vision Fund’s backers earlier this year, he added yet more leverage, taking out a $3.5-billion loan mortgaged against stakes in companies including Uber.

Under Misra’s watch, the fund’s ranks have grown to more than 400 employees, while it tries to shed its unruly image. It has tightened control functions in areas such as compliance, accounting and legal.

A second Vision Fund would help Son silence his critics. A rollout this summer of those plans was designed to showcase SoftBank’s ability to attract blue-chip investors such as Microsoft. But no outside investors have formally signed up yet for the $108-billion fund raising.

Executives within and close to SoftBank concede that renewed commitments from Saudi Arabia and its neighbor Abu Dhabi are crucial if there is to be a second fund. Both have been slow to commit, even as SoftBank executives are counting on Prince Mohammed to reinvest up to $30 billion with them.

“I don’t see how you could do it without them,” says one person involved.

Advisors to the crown prince have urged him to reduce his exposure to SoftBank. But he is said to want to honor his promise to Son.

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