SoftBank founder meets Trump, pledges US$50B to fund startups
"We are going to invest $50 billion in the U.S. and commit to create 50,000 new jobs,'' said SoftBank founder and CEO Masayoshi Son, who was pleased with Trump's vow to deregulate America
WASHINGTON—After a Dec. 6 meeting with Donald Trump, Japanese tech billionaire Masayoshi Son said he will invest $50 billion in new startups in the United States, committing to creating 50,000 new jobs over an unspecified time period.
Son is the founder and chief executive of SoftBank, one of Japan’s largest technology outfits, which owns the U.S. mobile carrier Sprint. Sprint shares initially spiked after the announcement. Son left Trump Tower after being escorted down the elevator by the president-elect, who touted the pledge before waiting investors.
“We are going to invest $50 billion in the U.S. and commit to create 50,000 new jobs,” Son told reporters. “We (will) invest into the new startup companies in the United States.”
The announcement is the latest instance in which Trump appears to be conducting economic policy via ad-hoc deal-making—sometimes taking credit whether he deserves it or not. Last week, the president-elect spoke at the Carrier furnace plant in Indianapolis after the company announced plans to keep 800 jobs at the plant instead of outsourcing them to Mexico. Trump quickly claimed he had saved those positions, even though the company is still shifting more than 1,000 jobs from that factory and another Indiana plant to Mexico.
Similarly, the week after the election Trump tweeted that he had dissuaded Ford Motor Co. from moving a Kentucky factory to Mexico. The claim was a stretch; Ford had no plans to move the plant and had already agreed to keep producing one specific model there, although it did back away from a plan to shift production of the Lincoln MKC, a small SUV, from Louisville to Cuautitlan, Mexico.
Trump quickly took credit for Son’s commitment on Tuesday, writing on Twitter: “Masa said he would never do this had we (Trump) not won the election!”
“I just came to celebrate his new job,” Son said. “Because he said he would do a lot of deregulation, I said, ‘This is great, the U.S. will become great again’.”
Trump plans to meet with leading tech executives next week, a group that will include venture capitalist Peter Thiel—one of Trump’s few supporters in Silicon Valley—and Cisco Systems CEO Chuck Robbins. The job commitments that Trump claims to have produced are symbolically resonant. Still, the economy has generated 2.25 million new jobs in the past 12 months and many economists say that accelerating this pace may be difficult in the long run because of the aging U.S. population.
Financial details about Son’s commitment and its timeframe remain unclear. T-Mobile did not answer emailed questions. Sprint spokesman Dave Tovar referred questions to Softbank. Foxconn, a tech manufacturer that makes iPhones for Apple in China, also did not answer questions. Its logo was next to Softbank’s on a piece of paper Son carried.
Sprint has struggled since its 2013 acquisition by Softbank. The carrier’s attempt to join with rival T-Mobile failed in 2014 after regulators objected to combining two of the four largest mobile telecom companies in the United States. T-Mobile has surpassed Sprint to become the No. 3 carrier, while Sprint has struggled with cost cuts and layoffs. (AT&T and Verizon are the largest wireless carriers.)
Analysts have predicted, however, that a Trump-led Justice Department and Federal Communications Commission would be more likely to allow telecom mergers, including a deal between Sprint and T-Mobile. T-Mobile has 50,000 employees and a stock-market value of $46 billion—but the similarities between those numbers and Son’s commitment could just be a coincidence.
In October, SoftBank announced that it would establish a $25 billion fund for technology investments that could grow to $100 billion. SoftBank said it signed an agreement with a fund run by the government of Saudi Arabia and other investors. Softbank spokesman Matthew Nicholson declined to comment on whether this fund would provide the money for the U.S. investments.
In addition to Sprint, SoftBank owns Britain’s ARM Holdings. ARM is known as an innovator in the “internet of things,” and in technology used in smartphones. It also sells the Pepper human-shaped companion robot for homes and businesses, and runs a solar energy business in Japan. The company, founded in 1981, also has within its investment empire financial technology and ride-booking services.
Arbel reported from New York. AP technology writer Michael Liedtke contributed to this report from San Francisco.