$50 Billion Pledge But Few Details From Japan's SoftBank Following Trump Meeting
Despite claims the Japanese group will create 50,000 new U.S. jobs, the money for the investments appears to be from an already announced fund and may be a political ploy to curry favor for a takeover of U.S. mobile carrier T-Mobile.
Donald Trump has claimed that Japan's SoftBank will invest $50 billion in the U.S., creating 50,000 new jobs, but details are sketchy and the money appears to be from a previously announced fund targeting artificial intelligence startups.
The president-elect met with SoftBank founder and CEO Masayoshi Son in New York on Tuesday, and later tweeted: "Masa (SoftBank) of Japan has agreed to invest $50 billion in the U.S. toward businesses and 50,000 new jobs … Masa said he would never do this had we (Trump) not won the election!"
In fact, money for the investments will likely come from the SoftBank Vision Fund, a $100 billion investment vehicle, which includes a $45 billion pledge from Saudi Arabia’s sovereign wealth fund, which was announced in October, before the U.S. election. The fund is dedicated to investing in AI startups and related companies.
A spokesperson from SoftBank's headquarters in Tokyo would confirm to The Hollywood Reporter only the $50 billion amount and that Son had said the aim was to create 50,000 jobs, but not if there was any new money for the investment.
The paperwork from the meeting, that Son showed the media in New York, had the logo of Taiwanese iPhone manufacturer Foxconn (Hon Hai) next to SoftBank's on the page with the investment figures. The SoftBank spokesperson declined to comment on Foxconn's involvement.
Given that SoftBank's entire group, including its Japanese mobile operations, U.S. mobile carrier Sprint, British chip-maker ARM and Yahoo Japan, employs a total of just under 70,000 people, the claim of 50,000 new jobs in the U.S. seems unrealistic. The fund is set to invest in AI and other advanced technology startups, which tend to employ relatively small numbers of people.
Son's real purpose in meeting with Trump may be to secure regulatory approval for a Sprint takeover of rival mobile carrier T-Mobile. SoftBank bought an 80 percent stake in Sprint in 2013 and attempted to buy T-Mobile the following year, but was blocked by antitrust regulators.
"He will do a lot of deregulation," Son said of Trump following his meeting with the president-elect.
SoftBank is currently overseeing a $2 billion cost-cutting program at loss-making Sprint, axing thousands of jobs. A takeover of T-Mobile would almost certainly result in more job cuts.
Investors reacted positively to the meeting with Trump and announcements, with stock in SoftBank rising 6.2 percent on Wednesday in Tokyo.