A blockbusting new $100 billion fund with Japanese and Saudi backing promises a long-term payback for Cambridge business ARM Holdings as it builds a world lead in the Internet of Things arena.

ARM’s new Japanese parent, SoftBank, is set to team up with Saudi sovereign wealth vehicle Public Investment Fund (PIF) to launch an investment war chest focusing exclusively on the technology sector.

Sources close to SoftBank believe a sizeable chunk of the investment could be injected into synergistic plays around ARM’s IoT ecosystem following the Japanese company’s $31bn acquisition of the UK superchip architect this summer.

SoftBank says it expects to contribute $25bn to the vehicle – tentatively branded the SoftBank Vision Fund – over the next five years.

PIF is expected to be the lead investment partner with a contribution of around $45 billion. Other partners are expected to make up the $30bn balance over time.

The vehicle will be operated out of the UK – almost certainly anchored in London – by a SoftBank subsidiary.

SoftBank chairman and CEO Masayoshi Son said the vehicle would allow the business to accelerate investments into technology companies globally.

ARM sits at the heart of progress towards a fully integrated global IoT system with its chips central to the network of sensors that will ultimately link billions of devices in smart homes, smart cities and futuristic industrial, medical and agricultural environments.

When SoftBank acquired ARM it pledged to maintain the company’s strong growth from an expanded Cambridge headquarters under existing management and double headcount in the cluster in the next five years. ARM employs more than 4,000 people worldwide and to date more than 85 billion systems-on-chips based on ARM’s IP have been shipped worldwide.

PIF has more than $2 trillion worth of assets under management and has signed an MOU with SoftBank for the new project.

Deputy Crown Prince Mohammed Bin Salman, chairman of PIF, said: “The Public Investment Fund is focused on achieving attractive long-term financial returns from its investments at home and abroad, as well as supporting the Kingdom’s Vision 2030 strategy to develop a diversified economy.

“We are delighted to sign this MOU with SBG given the long history, established industry relationships and strong investment performance of SoftBank Group and Masayoshi Son.”

Son added: “With the establishment of the SoftBank Vision Fund, we will be able to step up investments in technology companies globally. Over the next decade, the SoftBank Vision Fund will be the biggest investor in the technology sector. We will further accelerate the information revolution by contributing to its development.”