 "Masayoshi Son")
Masayoshi Son is a Japanese billionaire who wants to control the way your car talks to street lamps.
The 59-year old technology investor — a grandson of South Korean immigrants who has amassed one of Japan’s largest personal fortunes by pursuing grand, Silicon Valley-inspired visions — is best known outside his homeland for buying the American mobile phone carrier Sprint for $21.6 billion in 2013.
Now, after a short flirtation with retirement, Son has embarked on two of the most ambitious projects of his career. He is making his largest acquisition yet: the British microchip designer ARM Holdings, whose products are at the core of most of the world’s smartphones. And he is collaborating with Saudi Arabia’s ruling family to create what could become the world’s largest technology investment fund.
His goal is nothing less than to change how the material world works — and to turn his company, the SoftBank Group, into the future’s most important technology business. Specifically, he is planning for a day when millions of everyday objects run on chips and tiny computers that talk to one another — allowing street lamps, for example, to save power by switching themselves off when cars are not around.
The bets are risky. SoftBank is buying ARM for a rich $32 billion, and it plans to plow another $25 billion in the Saudi joint venture over the next five years. Neither guarantees that SoftBank will stay globally relevant in a fast-changing digital world.
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Son’s track record includes big victories, like an early investment in the Chinese e-commerce giant Alibaba Group. But his deal for Sprint has so far resulted mostly in red ink. And his ambitions led to the departure of his handpicked successor, leaving questions over who will oversee SoftBank’s future.
“Son acts on instinct,” said Satoshi Shima, a former senior lieutenant to Mr. Son who is now a professor at Tama University. “It’s a genius instinct, but it’s not logic.”
The ARM purchase is crucial to Son’s ambitions. The British company aims to wire up self-driving cars, internet-enabled home appliances, medical devices and even clothing.
“SoftBank has had a lot of businesses, but they’ve always ranked, say, third in Japan, or fourth in the US,” Son said in July after announcing the ARM deal. “This is the first time we’re directly controlling a business that is No. 1 in the world.”
With a $14.9 billion personal fortune, Son is ranked by Forbes as Japan’s second-richest man, behind Tadashi Yanai, the owner of Fast Retailing and its Uniqlo brand. But he spent his early life in poverty — His father started out as a bootlegger and small-time pig farmer before finding success in restaurants and pachinko, the Japanese offshoot of pinball. By the time he was a teenager, his family was wealthy enough that he was able to travel to the United States for college, eventually ending up at the University of California, Berkeley.
Son founded SoftBank in 1981 as a distributor of computer software. For start-up money, he has told biographers, he sold a prototype electronic translation machine to Sharp, the Japanese electronics company, for about $1 million. Son, who trained in economics, not engineering, came up with the general idea for the machine while still in college, then recruited others to create it — an approach he has followed throughout his career.
Takenobu Miki worked closely with Son for eight years before leaving SoftBank in 2006 to found an online language-training start-up. Initially, he was the only full-time employee at SoftBank, which, despite sounding like a tech start-up, operated “like an investment fund, with a portfolio of holdings that Son would adjust based on changing growth rates,” Miki said.
One item in the portfolio was Yahoo, an early investment that earned Son a fortune. The investment displayed Son’s willingness to act on a general conviction: in this case, that web portals would be crucial to the early commercial development of the internet. He did relatively little research on Yahoo itself, Miki recalled. “He asked some contacts in Silicon Valley which was the best web portal, and they said Yahoo. So he bought.”
Miki also remembers working with Son to create a growth projection for SoftBank that extended 300 years into the future.
“The goal was to become a 100 trillion-yen company,” Miki said, an amount equal to about $1 trillion. “Even at that time, Son wanted to become No. 1 in the world.”
SoftBank declined to make Son available for an interview for this article.
Son revels in confrontation, a trait that sets him apart in harmony-obsessed Japan. Twice, he has threatened to set fire to himself or the offices of Japanese telecommunications regulators — the first time in a dispute over access to fiber-optic cable, the second in a fight over internet censorship. He apologised in the second instance, in 2010, calling the threat an inappropriate joke.
In 2013, he apologised again at a news conference after he became involved in a shouting match with government officials over plans to allocate cellular spectrum to KDDI, a SoftBank rival. “I thought I had grown up,” he said.
Son has made bold, expensive acquisitions before. In 2006, he borrowed heavily to buy the Japanese arm of Vodafone, the British cellphone carrier, which was badly lagging two Japanese rivals. He tore up the company’s pricing strategy, using discounts to undercut the industry’s cozy near duopoly, then negotiated exclusive rights to carry Apple’s iPhone. Subscriber numbers and profits soared.
Hoping to repeat his success in the United States, SoftBank spent $21.6 billion to acquire Sprint in 2013.
But there were no exclusive iPhone deals to be had, and American officials blocked a plan by Son to buy another carrier, T-Mobile, which would have given the business more scale. Sprint has hemorrhaged money — it lost $302 million last quarter — though lately its subscriber base has been expanding.
SoftBank’s deal with Saudi Arabia will give Son even more money to play with, though it could also make future investments more complicated because the involvement of the Saudi government could lead to extra scrutiny when striking deals in other countries.
After the Sprint deal, it seemed Son was looking ahead to retirement. That would have fit with a life plan he drew up while still in his 20s, in which he resolved to build a business empire and hand it over to a successor in his 60s. In 2014, he hired a star Google executive, Nikesh Arora, and all but anointed him to that role.
But with the ARM acquisition, the chance for another big, transformative deal appears to have proved too tempting. Arora announced his resignation in June, a month before the acquisition. Son said he wanted to stay on for another decade or so to “work on a few more crazy ideas.”
©2016 The New York Times News Service
