The Midas Touch of Trump’s Ally, Masayoshi Son

• Masayoshi Son, the founder of SoftBank, is spearheading a new AI initiative backed by U.S. President Donald Trump.
• Despite past investment failures, Son is pivoting to AI, with plans to compete with tech giants like Nvidia.
• The ambitious project, named Stargate, aims to develop AI infrastructure with an initial $100 billion investment.
• Skepticism surrounds the project, with Elon Musk questioning the financial backing, but Son remains optimistic about the AI venture.

Masayoshi Son, the Japanese tycoon at the helm of U.S. President Donald Trump’s ambitious new AI initiative, is no stranger to the world of high-stakes investment. Born in Japan in 1957 to ethnic Korean parents, Son’s humble beginnings saw him and his family scraping a living by rearing chickens and hogs, all while battling discrimination. We collected leftover food from neighbors and fed it to cattle. It was slimy. We worked hard, Son recalled of his early years. And I’ve worked hard.

Son’s journey to the United States at the age of 16 marked the beginning of his meteoric rise. While studying at Berkeley, he developed a translation machine that he sold for around $1 million. In his 20s, Son founded investment group SoftBank and made colossally successful early bets on Yahoo! and Chinese ecommerce giant Alibaba in the 1990s. These investments not only made him, albeit briefly, the world’s richest person but also seemed to cement his reputation as a man with the Midas Touch.

I could smell him. We are the same animal, Son said of Alibaba’s founder Jack Ma, who replied, He probably has the biggest guts in the world on doing investments. Son’s news conferences, where he would show slides of geese laying golden eggs and set out glorious visions for the future, were eagerly awaited events.

Son’s Setbacks and New Direction

However, not all of Son’s investments have been golden. Yahoo! and Alibaba proved to be the exceptions, not the rules, and many other Silicon Valley investments have failed, some spectacularly. This included office-sharing firm WeWork, which went bankrupt, and the hospitality chain Oyo Rooms. In the 2022-23 financial year, SoftBank’s two Vision Funds posted a whopping 4.3 trillion yen ($32 billion at the time) in losses.

Despite these setbacks, Son, now 67, has decided to pivot to artificial intelligence (AI). Key to this coming revolution, Son hopes, will be majority SoftBank-owned Arm, the British chip designer whose technology is in 99 percent of smartphones. Son wants Arm to compete with the likes of Nvidia — the two are currently partners — and make chips for AI processes.

Son’s ambitious plans extend beyond AI technology. Appearing alongside the U.S. president-elect in December, Son promised that SoftBank would invest $50 billion in the United States and create 50,000 jobs within Trump’s first term. He later said he would double down with $100 billion and generate employment for 100,000 Americans.

The Stargate Project and Skepticism

On Tuesday, Son appeared at the White House along with Trump, OpenAI’s CEO Sam Altman, and Oracle founder Larry Ellison to announce Stargate. The aim is to build infrastructure to develop AI with an initial $100 billion, reaching $500 billion during Trump’s second term, Son said. Son will be chairman, SoftBank will be responsible for financing, and OpenAI for operations. Arm, Microsoft, Nvidia, Oracle, and OpenAI will provide the technology.

This is the beginning of a golden age for America, Son said, predicting artificial general intelligence (AGI), a benchmark of human-level intelligence, very very soon. After that artificial super intelligence will come to solve the issues that mankind never ever would have thought could be solved, he said.

However, not everyone shares Son’s optimism. Elon Musk, the world’s richest man and a key player in the newly installed administration, cast doubt on the $500 billion AI project. In a post on his social media platform X, Musk said the main investors don’t actually have the money. SoftBank has well under $10B secured. I have that on good authority, Musk added in a subsequent post.

Despite these doubts, SoftBank shares soared on the announcement, adding 10.6 percent on Wednesday in Tokyo. Masa has his mojo back, said Kirk Boodry, a SoftBank analyst at Astris Advisory. However, Amir Anvarzadeh from Asymmetric Advisors was less sure, saying that Son and Trump both like numbers. Unless SoftBank sells its stake in Arm, which is massively overvalued anyway, where is all the money going to come from?

Son’s ambitious AI project is reminiscent of historical events where technological advancements were met with both excitement and skepticism. The dot-com bubble of the late 1990s, for instance, saw a similar rush of investment into internet-based companies, many of which failed spectacularly. However, some, like Amazon and Google, emerged from the rubble to become global powerhouses. Whether Son’s AI venture will follow a similar trajectory remains to be seen.