Japanese mogul Masayoshi Son and President-elect Donald Trump have revealed a plan for SoftBank Group, a technology and telecoms giant, to invest $100 billion in projects in the United States over the next four years. Trump stated that this investment in artificial intelligence infrastructure would generate 100,000 jobs, double the 50,000 initially promised when Son committed to investing $50 billion in the U.S. following Trump’s 2016 victory. Son, the founder and CEO of SoftBank Group, is known for his bold decisions that can yield significant returns or not. SoftBank holds investments in numerous Silicon Valley startups, as well as major companies like Arm, a semiconductor design firm, and Alibaba, a Chinese e-commerce powerhouse. The surge in the stock market and the AI trend have increased the value of SoftBank’s assets, but the job creation impact of its investments remains uncertain.
Who is Masayoshi Son?
Son established SoftBank in the 1980s, transforming it from a telecommunications carrier to include ventures in renewable energy and technology. A prominent figure in Japan’s business realm, he was an early advocate for the internet, investing billions in Silicon Valley startups and other tech enterprises. Son’s roots are humble; during his time at the University of California, Berkeley, he invented a pocket translator that he sold for $1 million to Sharp Corp. He has built a career on taking risks, including spearheading the adoption of broadband services when the internet was still nascent in Japan. His $20 billion acquisition of U.S. mobile phone carrier Sprint Nextel Corp. in 2012 was Japan’s largest foreign purchase at that time.
Son is philosophical about his setbacks, like SoftBank’s $18.5 billion investment in WeWork, a co-working space provider that filed for bankruptcy protection last year. SoftBank also backed the unsuccessful robot pizza-making business Zume. Son is astute; SoftBank’s expenditures on lobbying and contributions to U.S. politicians and parties amount to billions of dollars. Moreover, Son promptly expressed support for Trump on both of his election wins.
What is SoftBank Group?
SoftBank has benefited from the recent uptick in the value of some investments, such as Coupang, an e-commerce company based in the U.S., DiDi Global, a Chinese mobility provider, and Bytedance, the Chinese firm behind TikTok. Son amassed his fortune through early investments in Yahoo’s search engine and Alibaba in China, with an initial investment of $20 million that has grown into an e-commerce and financial empire now valued at over $200 billion.
SoftBank has holdings in T-Mobile, Deutsche Telekom, Microsoft, Nvidia, and ride-sharing platform Uber, among numerous other companies grouped under its Vision Funds. Major investors in these funds include the Saudi Arabian sovereign wealth fund and the Abu Dhabi national wealth fund. SoftBank’s investments have reached hundreds of startups, including Nuro, a robo-delivery
An intriguing aspect of investor presentations has been the utilization of visual imagery, with some featuring depictions of a goose adorned with the label “AI Revolution,” symbolically laying golden eggs. This image evokes a sense of the potential wealth and prosperity that the proponents of artificial intelligence envision. Masayoshi Son, a key figure in this narrative, has expressed his belief in the imminent supremacy of artificial intelligence over human intelligence within the span of a decade. This profound transformation is anticipated to have wide-reaching implications across various sectors, encompassing industries such as transportation, pharmaceuticals, finance, manufacturing, logistics, and beyond. Son posits that those individuals and entities engaged in the realm of artificial intelligence will emerge as the frontrunners guiding the trajectory of the next 10 to 20 years.
SoftBank’s substantial ownership stake of approximately 90% in Arm Holdings positions the conglomerate favorably for the forthcoming wave of AI-driven applications. This strategic move is especially significant given that a majority of mobile devices currently rely on Arm-based processors, indicating a strong foundation for the expansion of AI technologies.
The commitment of $100 billion by SoftBank towards the advancement of AI infrastructure has been underscored by both Son and the broader corporate strategy. However, the specific allocation and utilization of these funds remain shrouded in ambiguity, leaving industry observers and stakeholders curious about the tangible impact of such a massive investment. The pervasive question concerning the potential displacement of jobs by AI-driven automation looms large, as the infrastructure supporting artificial intelligence often revolves around energy-intensive data processing centers, which are typically characterized by minimal human labor requirements once operational.
The uncertain landscape of job creation and retention within the context of AI expansion is further muddied by the disruptive effects of the COVID-19 pandemic. A notable example is Foxconn Technology Group, a prominent Taiwanese company renowned for its production of Apple iPhones. Initially heralded by President Trump for its commitment to establishing a $10 billion manufacturing complex that would employ 13,000 individuals in a small town near Milwaukee, the project faced significant downsizing in subsequent developments.
SoftBank itself stands as a sizable employer, boasting a workforce of 65,352 employees as of March. This considerable employee count underscores the conglomerate’s role as a significant player in the global job market. Notably, officials in Tokyo have lauded Son’s strategic initiatives as a positive step towards fostering goodwill amidst a backdrop of escalating trade tensions. The specter of potential tariff hikes on imports from key allies like Japan and China underscores the delicate balance of economic relationships in the current geopolitical landscape.
Japanese Trade and Industry Minister Yoji Muto expressed optimism regarding the potential for enhanced economic collaboration between Japanese and American companies, viewing such partnerships as a pivotal force for bolstering Japan-U.S. economic ties. Muto’s endorsement of the collaborative spirit between the two nations underscores the importance of fostering mutually beneficial relationships in an era marked by geopolitical uncertainties and economic volatility.
