Reuters, Tokyo One strategy for dealing with the next Trump administration is to go large and take care of the issues afterward, as demonstrated by SoftBank CEO Masayoshi Son’s commitment to invest billions in AI in the US.
That strategy might be difficult to duplicate for a Japanese corporation worried about navigating President Donald Trump’s second term and the possibility of high tariffs or other punitive measures.
Since the November presidential election, Son has made two appearances with Trump: last month, he pledged to invest $100 billion in the United States, and last week, he joined forces with OpenAI and Oracle to launch Stargate, a $500 billion AI infrastructure project.
A lot of things are yet unknown, such as SoftBank’s commitment and how the company would be financed. However, Son’s plan demonstrates how ostentatious investment announcements could appeal to Trump, even though more conventional Japanese firms probably won’t be able to simply adopt that tactic.
“The Trump administration will always welcome more investment in the mainland USA,” stated Kunihiko Miyake, a former diplomat who currently serves as the research director of the think tank Canon Institute for Global Studies.
“Mr. Son is not your typical Japanese person. Even if his approach is sound and effective, I doubt that regular Japanese businesspeople could follow suit.
According to Miyake, Son’s capacity for swift decision-making goes against the “traditional orthodoxy” of Japanese businesses, which emphasizes meticulous, long-term planning.
Son is renowned for making audacious predictions and dramatic declarations that haven’t always come to pass.
SoftBank invested billions of dollars in WeWork, a firm that went bankrupt, after the businessman previously predicted that the Internet of Things will be the “greatest paradigm shift in the history of humankind.”
Trump stated this week that he could begin putting tariffs on Canadian and Mexican goods as early as February 1. For months, that prospect has plagued Japan, causing automakers that export to the US, especially from Mexico, to worry.
Shigeru Ishiba, the prime minister of Japan, has not yet met Trump, in contrast to Son.
“GOLDEN AGE”
Son stated at the most recent meeting that Trump was the reason he chose to invest.
“This is the beginning of (a) golden age of America,” Son declared during the White House launch.
He informed Trump, “If you hadn’t won, we wouldn’t have made a decision.”
The revelation caused SoftBank’s stock to soar about 11% in Tokyo.
The organization owns a portfolio of investments in both listed and unlisted businesses, totaling about $25 billion.
According to a SoftBank representative, the investment in Stargate will be a portion of the $100 billion that was promised in December.
“In the U.S., you’re on Trump’s team or you’re not,” Astris Advisory analyst Kirk Boodry told reporters.
“No-one’s going to sit down and do an audit in four years and go ‘Did you meet your targets or not?'” he stated.
Son is using his 2016 strategy, in which he pledged to spend $50 billion in the United States during a meeting held in Manhattan’s Trump Tower.
With support from Middle Eastern sovereign wealth funds that made investments in startups, including those in the United States, SoftBank proceeded to establish the $100 billion Vision Fund.
Son’s recent investment pledges demonstrate that SoftBank is making a comeback following a period of layoffs brought on by the declining value of its technology portfolio.
Son is excited about the future of artificial intelligence, where the United States wants to stay ahead of China in a tech competition.
“How valuable the quality and combination of (SoftBank’s) assets and tech investment management capabilities are seen to be,” said Paul Golding, an analyst at Macquarie, in a note describing SoftBank’s involvement in Stargate.
According to a Reuters story last week, SoftBank owns the chip designer Arm, which has talked about creating its own chips and wants to raise pricing.
In order to counteract mature markets and declining demographics at home, Japanese businesses are seeking to develop in the United States.
Even though Japan is one of the United States’ closest allies, departing President Joe Biden prevented Nippon Steel from purchasing American steel earlier this month.
According to Miyake, Nippon Steel might not have failed if it had approached Washington with greater intelligence.
How many more businessmen from Japan are meeting Trump or joining him at the podium? Not at all. Only one,” he declared.
Son doesn’t work in a bureaucracy. Corporate bureaucrats make up the executives of large Japanese corporations. That is the distinction.
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