SoftBank's Bold AI Investment Strategy: A Unique Approach to Trump's America

Japan Inc will struggle to follow SoftBank's lead and go big with Trump

TOKYO (Reuters) - SoftBank CEO Masayoshi Son's plan to invest billions in AI in the United States shows one way to handle the new Trump administration: go big and deal with the details later. For a Japan Inc anxious about how to navigate the second term of President Donald Trump - and the threat of steep tariffs or other punitive measures - that approach may not be so easy to replicate. Son has appeared with Trump twice since the November presidential election, last month pledging to invest $100 billion in the U.S. and this week partnering with OpenAI and Oracle on a $500 billion AI infrastructure venture called Stargate. Many of the details are still unclear, including how the venture will be funded and what SoftBank's commitment will be. But Son's approach show how flashy investment announcements may win over Trump, although that strategy likely won't be easily to mimic for more traditional Japanese corporations. "More investment in the mainland USA is always something that will be welcomed by the Trump administration," said Kunihiko Miyake, a former diplomat who is now research director at the Canon Institute for Global Studies think tank. "Mr. Son is not an ordinary Japanese. Even if his methodology is good and successful, I don't think that ordinary Japanese business people can do the same." For one, Son's ability to make big decisions quickly goes against the "traditional orthodoxy" of Japanese companies, Miyake said, in reference to Japan Inc's emphasis on careful, long-term planning. Son himself is well known for making bold predications and splashy announcements which haven't always played out. The businessman once said the Internet of Things would be the "greatest paradigm shift in the history of humankind" and SoftBank poured billions into startup WeWork, which later went bankrupt. Trump this week said he could impose tariffs on goods from Mexico and Canada as early as Feb 1. That possibility has weighed on Japan for months, sparking concern among automakers that export from particularly Mexico into the United States. Unlike Son, Japan's Prime Minster Shigeru Ishiba has yet to meet Trump. 'GOLDEN AGE' At the latest meeting, Son said he decided to invest because of Trump. "This is a the beginning of (a) golden age of America," Son said at the launch at the White House. "We wouldn't have decided unless you won," he told Trump. SoftBank's shares jumped roughly 11% in Tokyo following the news. The group has around $25 billion to hand and a portfolio of stakes in listed and unlisted companies. The investment in Stargate will make up part of the $100 billion investment pledged in December, a SoftBank spokesperson said. "In the U.S. you're on Trump's team or you're not," said Kirk Boodry, an analyst at Astris Advisory. "No-one's going to sit down and do an audit in four years and go 'Did you meet your targets or not?'" he said. Son is redeploying his playbook from 2016, when he promised to invest $50 billion in the U.S. at a meeting in Trump Tower in Manhattan. SoftBank went on to launch the $100 billion Vision Fund with backing from Middle East sovereign wealth funds which invested in startups including in the U.S. The recent investment promises by Son show SoftBank is reemerging after a period of retrenchment sparked by the falling value of its tech portfolio. Son has expressed enthusiasm about the prospects for artificial intelligence, where the U.S. aims to maintain its edge in a tech race with China. SoftBank's participation in Stargate shows "how valuable the quality and combination of (SoftBank's) assets and tech investment management capabilities are seen to be," Macquarie analyst Paul Golding wrote in a note. SoftBank controls chip designer Arm which, Reuters reported last week, aims to hike its prices and has discussed designing its own chips. Japanese companies are looking to expand in the U.S. to help offset mature markets and deteriorating demographics domestically. While Japan is one of the closest allies of the U.S., Nippon Steel was earlier this month blocked from buying U.S. Steel by the outgoing President Joe Biden. If Nippon Steel had been more savvy in its approach to Washington, it may not have failed, Miyake said. "How many more Japanese businessmen are meeting Trump or standing on the podium with him? None. There's only one," he said. "Son is not a bureaucrat... Executives at big Japanese corporates are corporate bureaucrats. That's the difference." (Reporting by Sam Nussey and Anton Bridge; Editing by David Dolan and Kim Coghill)

Japan Inc will struggle to follow SoftBank's lead and go big with Trump

Many details remain unclear, including the funding strategy and SoftBank's role. However, Son's approach highlights how bold investment announcements could appeal to Trump, though this tactic may be difficult for more conventional Japanese companies to replicate. Kunihiko Miyake, a former diplomat, stated that Son's ability to make swift decisions contrasts with the "traditional orthodoxy" of Japanese companies.SoftBank chief executive officer (CEO) Masayoshi Son's plan to invest billions in AI in the United States shows one way to handle the new Trump administration: go big and deal with the details later. For a Japan Inc anxious about how to navigate the second term of President Donald Trump - and the threat of steep tariffs or other punitive measures - that approach may not be so easy to replicate. Son has appeared with Trump twice since the November presidential election, last month pledging to invest $100 billion in the US and this week partnering with OpenAI and Oracle on a $500 billion AI infrastructure venture called Stargate. Many of the details are still unclear, including how the venture will be funded and what SoftBank's commitment will be. But Son's approach show how flashy investment announcements may win over Trump, although that strategy likely won't be easily to mimic for more traditional Japanese corporations. "More investment in the mainland USA is always something that will be welcomed by the Trump administration," said Kunihiko Miyake, a former diplomat who is now research director at the Canon Institute for Global Studies think tank. "Mr. Son is not an ordinary Japanese. Even if his methodology is good and successful, I don't think that ordinary Japanese business people can do the same." For one, Son's ability to make big decisions quickly goes against the "traditional orthodoxy" of Japanese companies, Miyake said, in reference to Japan Inc's emphasis on careful, long-term planning. Son himself is well known for making bold predications and splashy announcements which haven't always played out. The businessman once said the Internet of Things would be the "greatest paradigm shift in the history of humankind" and SoftBank poured billions into startup WeWork, which later went bankrupt. Trump this week said he could impose tariffs on goods from Mexico and Canada as early as Feb 1. That possibility has weighed on Japan for months, sparking concern among automakers that export from particularly Mexico into the United States. Unlike Son, Japan's Prime Minster Shigeru Ishiba has yet to meet Trump. Golden age At the latest meeting, Son said he decided to invest because of Trump. "This is a the beginning of (a) golden age of America," Son said at the launch at the White House. "We wouldn't have decided unless you won," he told Trump. SoftBank's shares jumped roughly 11% in Tokyo following the news. The group has around $25 billion to hand and a portfolio of stakes in listed and unlisted companies. The investment in Stargate will make up part of the $100 billion investment pledged in December, a SoftBank spokesperson said. "In the US you're on Trump's team or you're not," said Kirk Boodry, an analyst at Astris Advisory. "No-one's going to sit down and do an audit in four years and go 'Did you meet your targets or not?'" he said. Son is redeploying his playbook from 2016, when he promised to invest $50 billion in the US at a meeting in Trump Tower in Manhattan. SoftBank went on to launch the $100 billion Vision Fund with backing from Middle East sovereign wealth funds which invested in startups including in the US The recent investment promises by Son show SoftBank is reemerging after a period of retrenchment sparked by the falling value of its tech portfolio. Son has expressed enthusiasm about the prospects for artificial intelligence, where the US aims to maintain its edge in a tech race with China. SoftBank's participation in Stargate shows "how valuable the quality and combination of (SoftBank's) assets and tech investment management capabilities are seen to be," Macquarie analyst Paul Golding wrote in a note. SoftBank controls chip designer Arm which, Reuters reported last week, aims to hike its prices and has discussed designing its own chips. Japanese companies are looking to expand in the US to help offset mature markets and deteriorating demographics domestically. While Japan is one of the closest allies of the US, Nippon Steel was earlier this month blocked from buying US Steel by the outgoing President Joe Biden. If Nippon Steel had been more savvy in its approach to Washington, it may not have failed, Miyake said. "How many more Japanese businessmen are meeting Trump or standing on the podium with him? None. There's only one," he said. "Son is not a bureaucrat... Executives at big Japanese corporates are corporate bureaucrats. That's the difference."