The Japanese financial holding SoftBank, very active in the telecommunications and electronics sectors, will invest 100 billion dollars in the United States over the next four years. This was announced on Monday by CEO Masayoshi Son together with President-elect Donald Trump, whose second term will begin in January 2025 for a duration of four years.
The press conference was also an opportunity to present the new American ambassador to Japan: George Glass, ex-banker and ex-ambassador to Portugal from 2017 to 2021 known for his anti-Chinese positions. “For us, Japan is very important,” Trump declared: the country is in fact one of America’s main allies in the Asia-Pacific, the region where the political rivalry with China is strongest.
THE PRECEDENT OF 2016
Trump said SoftBank’s investment will create one hundred thousand jobs in artificial intelligence and related infrastructure.
The Japanese group had already promised something very similar in December 2016 – a month before the start of Trump’s first term -, when Son announced an investment of 50,000 dollars and the creation of fifty thousand jobs: the figure was actually expense, he wrote Reuterswhile it is unclear whether all those jobs were created.
WHERE WILL THE MONEY COME FROM?
It is not even clear how SoftBank will finance the 100 billion investment, considering that as of September 30, the group had 27 billion in liquidity on its balance sheet. It is possible that the money will not come directly from SoftBank or its Vision Fund 2 fund (interested in OpenAI) but from Arm, the semiconductor company (British but also listed in the United States) under the control of the Japanese holding company.
Trump, however, has promised that he will speed up the authorization processes for all those companies that invest at least $1 billion in the United States.
BUT WILL SOFTBANK’S INVESTMENT BE MADE?
Several analysts have expressed doubts about the feasibility of SoftBank’s promises, given the paucity of details and considering Trump’s enthusiasm for sensational announcements on investments and employment which do not always materialize (such as the 10-year-old Foxconn factory in Wisconsin). billion dollars, significantly downsized).
Experts also wonder what SoftBank will decide to invest in, having already acquired microchip startup Graphcore and bought a stake in OpenAI to increase its participation in the artificial intelligence sector. A couple of months ago Masayoshi Son had predicted the advent of artificial super-intelligence, which he said would require multi-billion investments; He then added that his company was conserving financial resources for “the next big move.”
AN ANTI-CHINESE AT THE EMBASSY IN JAPAN
As mentioned, Trump nominated George Glass as ambassador to Japan. It is a position that serves primarily as support for the military alliance between Washington and Tokyo, concerned about military threats from China and North Korea.
There are over fifty thousand US troops stationed in Japan and the government is afraid that Trump’s return to the White House could create new frictions over the sharing of costs for maintaining this presence.
Tokyo also fears that the Trump administration will introduce new protectionist policies that are harmful to Japanese companies. The current president, Joe Biden, has already implemented export controls that limit the ability of Japanese microchip and machinery manufacturers to trade with China.
During his time as ambassador to Portugal, Glass had often spoken of the need to contain Chinese investments in strategic sectors.
WHAT WILL ABOUT THE NIPPON STEEL-US STEEL OPERATION?
Trump’s return will probably not change the situation for Nippon Steel, the Japanese steel group intending to acquire the American company Us Steel: both the current and the next president of the United States are in fact against the operation for political reasons (maintenance employment levels and national steelmaking capacity).
Nippon Steel has tried in various ways to reassure US political circles and public opinion about the acquisition of US Steel, for example by guaranteeing that the headquarters will not be moved and that there will be no layoffs, and by presenting the operation as useful to counter China’s influence on the global steel market.
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