BANGKOK (AP) — Japanese tycoon Masayoshi Son and President-elect Donald Trump have announced plans for the technology and telecommunications giant SoftBank Group to invest $100 billion in projects in the United States over the next four years.
Trump said investments in building AI infrastructure would create 100,000 jobs, double the 50,000 promised when Son pledged $50 billion in U.S. investments following Trump’s victory in 2016.
Son, founder and CEO of SoftBank Group, is known for making bold decisions that sometimes pay big and sometimes don’t. SoftBank has investments in dozens of Silicon Valley startups, along with big companies like semiconductor design company Arm and Chinese e-commerce giant Alibaba. The stock market rally and the AI craze have increased the value of their assets, but it’s unclear whether their investments will create as many jobs.
Who is Masayoshi Son?
Son founded SoftBank in the 1980s, expanding it from a telecommunications operator to encompass technology and renewable energy companies. A leading figure in the Japanese business world, he was one of the first to believe in the Internet, investing billions in Silicon Valley startups and other technology companies.
The son comes from a humble background. While at the University of California, Berkeley, he invented a pocket translator that he sold for $1 million to Japanese electronics maker Sharp Corp. He has made a career of taking risks, driving the adoption of broadband services when the Internet was still a Relatively new to Japan. Its $20 billion acquisition of U.S. mobile operator Sprint Nextel Corp. in 2012 was Japan’s largest foreign acquisition at the time.
Son is philosophical about his mistakes, such as SoftBank’s $18.5 billion investment in coworking space provider WeWork, which filed for bankruptcy protection last year. SoftBank also invested in the failed robot pizza-making company Zume. Son is astute: SoftBank-related spending on lobbying and donations to American politicians and parties runs into billions of dollars. And both times Trump was elected, Son was quick to show his support.
What is SoftBank Group?
SoftBank has benefited in recent months from the rising value of some investments, such as US e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
Son built his fortune with early investments in search engine Yahoo and China’s Alibaba, a shrewd $20 million initial outlay on what has become a financial and e-commerce empire with a market capitalization of more than $200. billion dollars.
SoftBank has investments in T-Mobile, Deutsche Telekom, Microsoft, Nvidia and the ride-sharing platform Uber, among hundreds of other companies that it groups in its Vision Funds. Saudi Arabia’s sovereign wealth fund and Abu Dhabi’s national fund are among the largest investors in those funds.
The hundreds of startups that have received investments from SoftBank include Nuro, a self-delivery company; dog walking app Wag; the South Korean logistics company Coupang; Southeast Asia ride-sharing app Grab; and the office messaging app Slack.
After several difficult years, SoftBank returned to profitability in the last quarter, helped by returns from its Vision Fund investments. An important factor? Royalties and licenses related to its interests in the UK-based computer chip design company Arm, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronics and artificial intelligence applications.
They are strongly committed to AI
SoftBank’s investor presentations have sometimes featured images of a so-called “AI Revolution” goose laying golden eggs.
Son has said he believes artificial intelligence will surpass human intelligence within a decade, affecting every industry from transportation and pharmaceuticals to finance, manufacturing, logistics and others, and that companies and people who work with AI will be the leaders of the next 10 to 20 years. . SoftBank’s roughly 90% stake in Arm has positioned it well for the expansion of AI applications, as most mobile devices operate on Arm-based processors.
Trump and Son said the $100 billion SoftBank has promised to invest will go toward building AI infrastructure, but the nature of that spending remains unclear. The ultimate impact of AI on jobs remains an open question, but much of its infrastructure is based on energy-intensive data processing centers that will likely employ relatively few people once built.
What about jobs?
Even if SoftBank actually invested the $50 billion promised the last time Trump headed to the White House, it’s unclear how many jobs it created.
Closures during the COVID-19 pandemic complicated matters. Foxconn Technology Group, a Taiwanese company best known for making Apple iPhones, earned praise from Trump after saying in 2017 that it would build a $10 billion complex employing 13,000 people in a small city south of Milwaukee. But that investment was drastically reduced.
SoftBank itself says it had 65,352 employees in March.
Officials in Tokyo praised Son’s initiative, calling it a gesture of goodwill at a time of heightened concern about whether Trump will impose across-the-board tariff increases on imports from allies such as Japan, as well as China.
“Generally speaking, I think that the expansion of investment through a constant accumulation of efforts between Japanese and American companies would help further strengthen economic ties between Japan and the United States, so I find it charming,” said Yoji Muto, Minister of Trade and Industry of Japan.
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Associated Press journalist Mari Yamaguchi in Tokyo contributed.
