Masa Son's Promised Investment in Trump's America: A Cautious Outlook

Analysis by Allison Morrow and David Goldman

New York — Another enigmatic billionaire has appeared at Mar-a-Lago, aiming to boost the Donald Trump brand as the president-elect prepares for a second term in the White House.

In Case You Missed It: On Monday, Japanese investor Masayoshi Son joined Trump to unveil a significant plan for a $100 billion investment in various projects across the United States over the next four years. This initiative aims to generate 100,000 new jobs in advanced sectors, notably in artificial intelligence and other emerging technologies. (In 2024, it seems every big investment is tied to AI.) This ambitious funding will be led by Son’s company, SoftBank Group, which, contrary to its name, functions more as a global technology investment firm than a traditional bank.

This is not the first time a president has sought to foster economic goodwill through partnerships with corporations. However, the outcomes of such arrangements are often filled with grand promises and may lack substance, as Trump experienced during his first term.

A notable example occurred in 2017 when Trump, alongside Taiwanese manufacturer Foxconn, announced plans for a $10 billion electronics factory in Wisconsin, projecting 13,000 new jobs. Ultimately, Foxconn scaled back its plans significantly, investing only $672 million in a revised agreement that resulted in fewer than 1,500 jobs.

Foxconn has claimed to have invested $1 billion in Wisconsin, and it maintains a large facility for data servers employing over 1,000 workers. However, the significant manufacturing hub that Trump once touted has transitioned into a data center for Microsoft focused on AI training.

This is not the first time a substantial promise has been made. Before Trump’s earlier term, SoftBank had announced a $50 billion investment with the expectation of creating 50,000 jobs, which included their backing for a satellite start-up, OneWeb, a competitor to Elon Musk’s Starlink.

SoftBank reportedly invested approximately $75 billion in U.S. companies via its Vision Fund. Nonetheless, the company has not provided clarity on how many jobs were actually created from those investments.

Furthermore, there are notable precedents to overpromising in such scenarios. For instance, in 2009, shortly after Barack Obama took office, he communicated with Caterpillar employees about his nearly $800 billion stimulus plan that was aimed at preserving jobs—soon after which Caterpillar announced major layoffs.

While not all partnerships between prominent executives and presidents result in failures, many do not fulfill their lofty ambitions. In 2017, Intel’s CEO Brian Krzanich committed to spend $7 billion to restart a semiconductor factory in Arizona, which eventually opened in 2020.

The lesson appears to be that while intentions may be virtuous, reality often delivers a more complicated outcome.

Son, who made significant early bets on firms like Yahoo and Alibaba, has encountered challenging results in more recent investments. His SoftBank Vision Fund, established in 2017, has faced criticism for backing projects like WeWork, which faced bankruptcy, and losing $1 billion on Wirecard, a payments company linked to a major fraud scandal.

Key Takeaway: Although Son's investment approach has faced scrutiny, the announcement made this week is not an ordinary business investment. The true return on investment is likely aligned with pleasing Trump. Son is one among many billionaires attempting to gain favor with Trump, competing with others like Jeff Bezos and Mark Zuckerberg, who have contributed financial support to Trump’s inaugural initiatives.

In essence, many of these business leaders seek to secure a favorable position on Trump’s “nice” list, hoping to avoid any unfavorable treatment in the future.

investment, Trump, technology