President-elect Donald Trump, with SoftBank Group CEO Masayoshi Son at his side, announced on Monday that SoftBank would invest $100 billion in the U.S. over the next four years, boosting the U.S. economy.
In his joint appearance with Son, Trump said the investment would create 100,000 jobs focused on artificial intelligence and related infrastructure. The money would be deployed before the end of Trump’s term. The Monday announcement echoes Son’s pledge to then-President-elect Trump in December 2016 at Trump Tower, when he said he would spend $50 billion and create 50,000 jobs.
One crucial difference between 2016 and 2024 in terms of the motivations behind the investments is Trump’s stipulations regarding investments this time around. Recently, the president-elect announced an incentivization program regarding donations. While his plan currently only stipulates donations for the inauguration, Trump has floated the idea of carrying this plan over, offering perks and benefits to any company or individual who donates over a million dollars to the Trump White House. For instance, just last week, Trump promised to extend fast-track permitting to any company that invests $1 billion or more in the United States.
Son’s Previous Investment
While Son’s $200 billion investment in 2016 was eventually spent, it is unclear whether those jobs were created. Trump said SoftBank’s latest investment pledge was evidence of “monumental confidence in America’s future.” He playfully encouraged Son to make the investment. Son chuckled and said that he would try.
The $100 billion pledge, made at a flag-bedecked event at Trump’s Mar-a-Lago club in Palm Beach, Florida, aligns with his pledge to bolster the U.S. economy and reduce the effect of inflation on Americans during his second term, which begins on Jan. 20.
It is unclear how SoftBank plans to fund the investment promise. According to its most recent earnings report, SoftBank Group had about $27 billion in cash on its balance sheet as of Sept. 30. The company’s Vision Fund 2 also has $3 billion left to deploy. A source familiar with the matter said the capital could also come from chipmaker Arm Holdings.
Trump called Son “one of the most accomplished business leaders of our time.”
The Fallout of WeWork
SoftBank has been rebuilding its finances after the failure of high-flying office-sharing startup WeWork and after some of the tech firms it invests in through its Vision Fund unit fell out of favor among investors. Following the announcement, SoftBank shares jumped more than 3% in trading in Tokyo on Tuesday morning.
Trump has an affinity for splashy announcements promising thousands of jobs, even though such investments do not always pan out. Early in his first term, he announced a $10 billion investment by Foxconn in a Wisconsin factory that promised thousands of jobs but was mostly abandoned.
“I don’t think there’s a tangible plan in the offing,” said Amir Anvarzadeh, Japan equity strategist at Asymmetric Advisors, regarding the SoftBank announcement.
“The question arises: what are they going to buy? There’s already a lot of money chasing fantastic companies. The low-hanging fruit in AI has come and gone,” Anvarzadeh added.
Son’s Belief in AI
Son has been a strong proponent of AI’s potential and has been pushing to expand SoftBank’s exposure to the sector, taking a stake in OpenAI and acquiring chip startup Graphcore. After a sharp decline in shares between 2021 and 2023, SoftBank stock has recovered, gaining nearly 55% year-to-date.
In October, Son reiterated his belief in the coming of artificial super-intelligence, saying it would require hundreds of billions of dollars of investment.
Son said he was saving up funds “so I can make the next big move,” but did not provide any details.
“We do not expect that the company’s AI investment plans have materially changed,” Astris Advisory analyst Kirk Boodry wrote in a note. “The company is making a pledge largely based on existing commitments.”
