On December 10, 2019, SoftBank, a Japan-based conglomerate investor group, promised to invest $50 billion in the US, which is likely to generate 50,000 jobs for Americans. Masayoshi Son, the CEO SoftBank had already promised to invest nearly $100 billion under the “Vision Fund” (VF) three years ago.
SoftBank’s Performance under the Vision
SoftBank Vision Fund (VF), a subsidiary of SoftBank Group Corp., is a project that aims at providing massive funding to various companies. SoftBank was able to garner capital of more than $93 billion that made the creation of the VF on May 27, 2017, by partnering with the Public Investment Fund (PIF), Saudi Arabia’s leading investor.
The VF is designed to invest in several sectors including artificial intelligence (AI), robotics, communications infrastructure, telecoms, computational biology, cloud technologies and software, consumer internet businesses, financial technology, and mobile apps.
Through this vision, the group aims at expanding its existing technology and accelerating its progress toward the next expansion called SoftBank 2. As mentioned on the SoftBank’s website, “The vision aims to invest in businesses and foundational platforms that SoftBank believes to revolutionize and innovate the world tomorrow.”
A Big Relief for Trump’s Promise
One of the significant factors for Trump’s victory in the 2016 US Presidential election was his promise to bringing back jobs to America. SoftBank’s promise has coincided with Trump’s attempts of creating employment in the US during his first term in the office.
In support of Trump’s promises, many large companies including Alibaba and Amazon increased their investments for creating more jobs in the country. To stay competitive with others, SoftBank’s subsidiary telecom company, Sprint entered into a merger deal with T-Mobile, a German telecom company during the Obama administration.
Son’s promise of VF was a big relief for Trump, as he agreed to invest a massive amount in the US during the Trump administration.
Vision Funds’ Investment and its Challenges
In the backdrop of Son’s promise of VF, Trump had earlier commented, “Ladies and gentlemen, this is Masa of SoftBank of Japan and he has just agreed to invest $50 billion in the U.S. and [create] 50,000 jobs.”
A spokesperson in SoftBank explained, “The Vision Fund and other SoftBank vehicles have poured $47 billion into the U.S. economy by way of investing in dozens of companies, from Silicon Valley darlings like messaging app Slack to food delivery service DoorDash. Nearly half, a reported $18.5 billion went to co-working startup WeWork.” In three years of Son’s promise, SoftBank invested $2.5 billion to Flipkart alone.
However, the question arises over Son’s promise of creating 50,000 jobs for Americans, as a majority of the Vision Fund was invested for the private companies.
Moreover, the group made a recent move to reducing the number of employees to cut expenses. Many of Son’s investments, including Uber to WeWork, have recently decided to resize their employees because of their rapidly declining revenues. Therefore, the key question remains whether the group can keep its promise.
Hello, I’m Anna Yeo. If you like my news coverage, please drop a good word in my inbox. I’m journalist by profession and have been part of many major reporting across the globe. I like to write crisp and factual news. I have completed my masters degree in journalism. Feel free to contact me at [email protected]