A former senior lieutenant of SoftBank founder, chairman and chief executive Masayoshi Son, says working for the tycoon opened a window on the technology billionaire’s personality and business acumen.
Stanley Chao served as Son’s executive vice-president for the Asia-Pacific region when SoftBank owned Kingston Technology, a maker of memory for electronics in Fountain Valley, California.
A raft of reports have attempted to decipher what makes Son tick. As far as Son’s investments are concerned, size is what matters, according to Chao. The approach “is all about big and getting bigger.”
Son is a 59-year-old South Korean who was born in Japan and educated at the University of California at Berkeley. “It’s very Korean,” Chao says of the strategy.
Drawing a distinction between the Korean and Japanese national temperaments, Chao says Son’s personality makes him an exception among his more risk-averse, lower-profile Japanese peers. “Son’s sitting on US$130 billion in debt and he continues to buy. He is the all-time gambler,” Chao says. Son is apolitical, and appears to have no preference for any nation or ideology. “We never discussed politics. He is strictly business,” Chao says.
Gary N. Kleiman, a specialist in emerging markets who is based in Washington, says Son has shown he understands the value of cultivating relationships with people in high places, especially when mega-deals by players such as SoftBank may ruffle protectionist feathers outside Japan.
Kleiman says an example is Son’s meeting in December with Donald Trump, who had not yet taken office as the 45th US President. Son promised to invest US$50 billion in US technology startups and create tens of thousands of jobs in the America. “Son seems to have ingratiated himself as a fellow billionaire with Trump and to have insulated himself from any controversy,” Kleiman says.
Son founded SoftBank in 1981 to distribute computer software. The company began in a tiny office staffed by two part-timers before Son branched out into a dizzyingly extensive array of businesses, including publishing technology magazines, computer trade shows, satellite television and chip boards. He entered the mobile telecommunications business when SoftBank bought Vodafone Japan in 2006.
Son was an early investor in Alibaba and Yahoo, and today he jointly runs Yahoo Japan. In 2013, he took a stake of 80% in US wireless telco Sprint. He went on to buy British chip and software designer ARM for US$32 billion last year. He recently promised to plow US$10 billion into Indian tech companies over the next 10 years. His stake in Alibaba was valued at US$56 billion last year, according to the SoftBank corporate website.
The swashbuckling tycoon has experienced some wild swings. He lost the US$158 million invested in US online grocer Webvan when it was bankrupted in the dotcom bust in 2001. He also lost another US$1 billion on his investment in Kingston Technology in the 1990s. More recently, Sprint has gushed red ink.
The US Justice Department blocked the merger of Sprint and a rival, T-Mobile, proposed by SoftBank in 2014. Some say Son’s commitment to Trump to invest US$50 billion in the US is meant to unblock the merger. SoftBank did not respond to a request to comment.
Son has an expansive, perhaps fantastic vision of what SoftBank can achieve. He has said in public that he intends to focus on the Internet of Things, in which computing devices are embedded in mundane objects and share data with each other.
The tycoon told the Mobile World Congress in Barcelona on February 27 that he expected ARM to churn out 1 trillion chips for the Internet of Things in the next two decades. Son imagines that in 30 years a single computer chip will perform as well as a human with an IQ of 10,000. “I really believe this,” Son said in his keynote speech.
Son means to push heavily into artificial intelligence in the next five to 10 years, according to Chao. Son is convinced technology will someday enable human beings to communicate telepathically and that he wants SoftBank to be the key to unlock that ability.
What is Son’s ultimate goal? “He wants to control all data,” Chao says. “It’s a kind of world dominance, but not in a political sense.” Chao says Son envisions controlling all storage and transfer of data, and the relevant hardware functions. Son’s interest in AI and telepathy are part of his grand scheme to make SoftBank the world leader in data.
To say that Son takes the long view is an understatement. Chao says that in the 1990s Son had a 300-year business plan for SoftBank in hand. “It was pretty well written,” Chao says. “It didn’t have finite details. But it was about world dominance, about how he or his group was going to control a lot of things. It was the ultimate super-corporation.”