Late one afternoon in October 2023, as the sun slipped down over Tokyo Bay, Masayoshi Son was sitting in his private office at SoftBank headquarters, at the head of a wooden table almost as long as Vladimir Putin’s in the Kremlin. A diminutive, balding figure dressed casually in a jacket and slacks, Son was recounting to me the low point of his career, a year earlier, when he announced he was disappearing from public view.
“What a shitty life!” he exclaimed, with a trace of self-pity. “You know on my Zoom call, I see my face often on the video screen and I hate looking at my face. What an ugly face. I’m just getting old . . . What have I achieved? . . . I have done nothing that I can be proud of.”
At face value, it was an astonishing admission. Son, then 66, ranked among the world’s most renowned investors. He invested in ecommerce giants Yahoo and Alibaba before they became household names. At the height of the dotcom bubble in early 2000, he was briefly the richest man in the world. When it burst, he lost 97 per cent of his fortune, around $70bn.
But he bounced back, launching a successful broadband and mobile phone business in Japan, propelled by an exclusive deal to distribute Apple’s iPhone. Then he disrupted Silicon Valley with the $100bn SoftBank Vision Fund, and ended up making the biggest swing and miss in the history of investing. (Hence his temporary vanishing act.)
As editor of the Financial Times, I’d met Son twice and he intrigued me as a subject for a biography. A compulsive risk taker, his story was a classic entrepreneur’s tale of survival and perpetual reinvention. But was Son a tech visionary or simply an inveterate gambler who got lucky? Why was SoftBank, the company he founded in 1981 as a pioneering software distribution business in Japan, so often described as a house of cards?
Answering those questions proved more difficult than I anticipated. Twice I flew to Tokyo, only to be informed that the boss was too busy to see me. When I complained that my subject was more elusive than a Bengal tiger, an ex-SoftBank executive, Indian by birth, replied: “In that case, I suggest you bring a goat.”
In western media Son often comes across as a cartoon character. He has compared himself to Yoda in Star Wars; Napoleon (of which more later); and Jesus Christ (who was equally misunderstood, apparently). Obsessed by longevity, he has told friends that he hopes to live past 120, and that SoftBank should be built to last 300 years.
After four sit-downs with Son, as well as interviewing more than 150 people who know or have worked with him, I have concluded there’s a lot more to this restless character than meets the eye. While Son did not invent, control or own a breakthrough technology, he is the archetypal middleman. He has ridden the technological wave which has created untold wealth and penetrated every corner of our society.
His is a story of our times.
Masayoshi Son is a quintessential outsider. This may explain his bottomless risk appetite and his desire to prove himself, over and over again. He was born in 1957 to poverty-stricken second-generation Korean immigrants on the island of Kyushu in the western Japanese archipelago. The family home was the equivalent of a cowshed, one of dozens of makeshift dwellings on a plot of unregistered land near the railway station.
Years later, Son confessed to a friend that he suffered from a recurring dream, waking up to the stench of pig faeces in his nostrils. His friend told him it wasn’t a nightmare but a childhood memory. “We started at the bottom of society,” Son told me. “I didn’t even know what nationality I was.”
As Korean-Japanese, the Son family followed tradition and lived under a Japanese name, Yasumoto. (Son later persuaded the authorities to let him combine his Japanese first name and Korean surname — a notable breakthrough.) His father Mitsunori was a bootlegger at the age of 14, later diversifying into pig breeding, loan sharking and pachinko, a form of low-stakes gambling that offered a livelihood to Koreans shut out of the Japanese economy.
In April 2023, Mitsunori, 87, sitting in the family home adorned with photographs of his favoured second son, described how he rearranged the pins on his pachinko slot machines so that everybody in town thought they were a winner. His upfront losses were eye-watering. Then he moved the pins back into place — and started making serious money.
Watching his father, Son learnt how to hustle. But the boy’s ambitions went way beyond pachinko gambling. He wanted to escape Japan and a lifetime of discrimination. Aged 16, he announced he wanted to learn English and study in the US. His family were dismayed, but soon relented.
Son’s six years in California, which included three years as a student at the University of California at Berkeley, were a life-changing experience. He saw first-hand the PC revolution. He read about Microsoft’s Bill Gates and Apple’s Steve Jobs. He also made his first fortune, developing a pocket speech synthesiser with the help of a team of UC Berkeley engineers led by Professor Forrest Mozer, a nuclear particle physicist.
I tracked down Professor Mozer, then aged 92, during a visit to Berkeley in October 2021. He described Son as a modest student with little technical background but a businessman with a capital B. “That guy is going to own Japan one day,” he told his wife.
Later Mozer claimed that Son had gone behind his back and contracted with Japanese companies to sell American microchips (for the speech translator) that did not exist and for prices that he’d invented. He said he was not told Son was due to earn almost $1mn in fees. “I was his first business partner,” Mozer told me, “and on his first business deal he lied and cheated me.”
When questioned, Son rejected that, and insisted he had wrongly assumed he had permission to do what he did. (Mozer himself concedes there was no written contract between the two, just a gentleman’s agreement.) Son unravelled the Japanese deals and vowed to take more care in future. Perhaps the episode marks Son’s “original sin”, a short-cut on the way to the top that many entrepreneurs would recognise.
After his sojourn in California, Son returned home. In 1980, Japan seemed destined to be the world’s number-one economic power. Son was perfectly placed to act as a gateway for US tech businesses seeking to penetrate the Japanese market.
Bill Gates describes Son as a cultural interpreter as much as a commercial middleman. “Whenever you’ve been three or four days in Japan, and have had nothing but polite things to say to each other, invariably through an interpreter. . . then there’s this guy who speaks perfect English. It was such a relief. Masa was easy to talk to. He was an insider but an outsider too.”
After software distribution, Son pivoted to investing in internet-related business, placing two spectacular bets: on Yahoo, which earned him a six-fold return ($3.5bn), and on Alibaba, which gave a 1,310-fold return ($97bn). While he built a successful Japanese affiliate, Yahoo Japan, he never took his eye off the US market.
In the mid-1990s, he acquired Las Vegas-based Comdex, then the number-one tech trade fair, the Ziff Davis computer publishing empire and a host of dotcom properties. In 2013, he went one better and bought Sprint, the lossmaking US telecoms operator, finally pulling off a merger with T-Mobile that created a “third force” alongside Verizon and AT&T.
Throughout, SoftBank took advantage of the almost three decades of near zero interest rates in Japan. Son borrowed cheaply to pay generous prices for US assets, raising billions on the corporate bond market. “You don’t understand,” he once told a fretting colleague, “in Japan, money is free.”
In assessing Son’s track record, it is important to distinguish between SoftBank Corp, the listed company responsible for the operating companies, and SoftBank Group, the publicly quoted group holding company and major investor.
Businesses such as Yahoo Japan and SoftBank Mobile have proved highly successful and profitable. The Sprint acquisition, initially a dud, proved a winner after the T-Mobile merger. But Son has always cared more about growth than profits. SoftBank Group has long been highly leveraged, meaning it has a lot of debt in its capital structure. At times, it has ranked as one of the world’s top 10 indebted companies — not a comfortable position when inflation roared back in 2021.
Son is a major shareholder and a major borrower, using his SoftBank shares as collateral. Risk is built in. Suppose SoftBank shares fall sharply, lowering the value of the collateral, as has occurred many times during Son’s wild ride. Then panicky banks might demand the loans be repaid, destabilising the entire corporate structure.
Son bristles when challenged, emphasising that as a co-investor he has “skin in the game” and therefore an incentive to invest responsibly. Nevertheless, some associates believe SoftBank’s founder is “addicted” to leverage. They told me he became hooked after the $20bn bid in 2006 to buy Vodafone Japan, the largest leveraged buyout in Asia at the time. He succeeded thanks to a financial magician by the name of Rajeev Misra, a former Deutsche Bank debt trader whose reward was to be put in charge of the $100bn SoftBank Vision Fund in 2017.
Misra was one of several talented executives trained as mathematicians, who applied their engineering skills to finance rather than academia. Over time, they lent a mercenary streak to SoftBank, stoking their boss’s appetite for dealmaking.
To some degree, the cultural shift was inevitable as SoftBank evolved from a Japanese technology conglomerate to a global investment group. But it was also a recipe for infighting at the top, latterly between Misra and Marcelo Claure, a 6ft 6in Bolivian-American who led the Sprint turnaround. Often the spats played out in the media. “They leaked like septic tanks,” says a SoftBank colleague.
Although Son adopts an abstemious public profile, his private consumption is more extravagant (albeit drawing on his own money rather than the company’s). He pays for his private plane and his favourite red wine (from Domaine de la Romanée-Conti, at a minimum $6,000 a bottle). He has extensive properties around the world, including three conjoining houses in central Tokyo likened by one visitor to Wayne Manor, fictional home of Batman.
The basement features an artificial golf course where Son and guests can play in all-weather conditions on any course in the world. One portion of the house is decorated in the Empire style, the period between 1800 and 1815 when Napoleon modernised France and redrew the map of Europe. I discovered Son has a fascination with the Corsican Little Corporal, a fellow outsider.
In early 2020, a team from Elliott Management, the New York activist investor, paid a visit to Japan. Having bought a 3 per cent stake in SoftBank, their goal was to persuade Son to improve corporate governance, thereby boosting the share price. When an Elliott executive invoked the example of Mark Zuckerberg, Facebook’s founder, or Bill Gates of Microsoft, Son erupted in frustration.
“These are one-business guys. I am involved in 100 businesses and I control the entire [tech] ecosystem,” he remonstrated. “The right comparison for me is Napoleon, Genghis Khan or Emperor Qin [who built the Great Wall]. I am not a CEO. I am building an empire.”
Delusional? Not if you believe that Son is bent on “Making Japan Great Again”. After the collapse of the bubble economy in 1989-90, Japan entered a “lost decade” characterised by deflation and tepid growth. Son, the outlier, remains an object of suspicion among the Japanese business establishment. He counters by playing the patriot, claiming he wants to revive the country’s animal spirits. But his vision of a resurgent Japan contains a megalomaniacal streak.
When Son launched the $100bn SoftBank Vision Fund, an arms race in the world of venture capital ensued, leading to wholesale value destruction. Doling out sums of between $100mn and $200mn would have meant Son meeting hundreds of individual founders to check their credentials. Even with his legendary stamina, working 20-hour days, often flying on his private jet through multiple time zones, that was a physical impossibility.
Crucially, much larger sums — $500mn or more — were required to move the needle in a giant fund like the Vision Fund. The target companies couldn’t be start-ups as such; they were “later-stage” companies, turbocharged for growth by the injection of SoftBank capital. One of these companies was WeWork, founded by Adam Neumann, a tall Israeli with a planet-sized ego.
Son was utterly sold on Neumann, a fellow dreamer who spoke about world domination. When WeWork’s losses piled up, colleagues pleaded with Son to stop. The boss refused to budge.
“As you all object, I am becoming more and more interested in this company,” he said. “I am looking at Alibaba and only he [Neumann] looks like Alibaba today.”
The initial Alibaba investment in 2000 — two bets of $20mn and $80mn — turns out to have been a curse as much as a blessing. Eager to prove his success wasn’t a one-off, Son talked about creating 10 SoftBank Vision Funds with a total war chest of $1tn dollars. These were castles in the air — the stuff of hubris.
Those who know Son say he is a brilliant operator (when he focuses), an average investor and a terrible trader. Between 2019-21, as markets turned down, Son suffered heavy losses on Vision Funds 1 and 2. He tried to recover by speculating wildly on options trading, using an in-house hedge fund called Northstar. SoftBank was left nursing multibillion-dollar losses.
For 18 months, he withdrew from public view, ostensibly serving penance but in reality plotting a comeback. Today, he is betting the house on artificial intelligence in order to reclaim his position as one of the world’s leading entrepreneur futurists.
To date, his record is fitful at best. Between 2017 and 2022, he mentioned “AI” more than 500 times in quarterly and annual results presentations. Yet when it came to OpenAI and its breakthrough product ChatGPT, the lead investor was Microsoft. Son never got a look in.
Part of the problem was timing. In the Vision Fund years, AI businesses were either small scale, early in development or out of the public eye. During the Covid pandemic, Son was grounded in Tokyo. In early 2022, when travel restrictions were finally lifted, with the exception of China, SoftBank was sandbagged by record losses.
Had Son conserved his firepower rather than splurging money on more than 500 separate companies in the Vision Funds, he would have been perfectly placed. With company valuations beaten down by higher interest rates, Son could have acquired stakes in promising AI-related businesses at bargain prices. In hindsight, he admits, “Timing-wise maybe we were a little too early.”
It’s a familiar story: right instincts, wrong timing. (If he’d held on to his 5 per cent stake in advanced chipmaker Nvidia in 2019, he could have made another fortune.) Yet one of Son’s AI bets has paid off handsomely. UK chip designer Arm — acquired in 2016 — is at the centre of yet another super-vision: a $64bn plan to transform SoftBank Group into a sprawling AI powerhouse, including a foray into the development of artificial-intelligence chips, announced in May. The goal is to build a prototype by 2025, with each chip being able to process vast volumes of data. This hugely ambitious venture aims to create SoftBank Group’s own vertically integrated AI ecosystem, from manufacturing chips and operating data centres to industrial robots and power generation.
True, SoftBank cannot touch the likes of Amazon, Google and Microsoft, but Son is a customer and supplier to the hyperscalers. His new chipmaking venture involves billions of dollars of investment. Once a mass-production system is established, the AI chip business could be spun off, realising billions of dollars of value to its parent SoftBank.
How does this movie end? Those betting on a financial apocalypse have been disappointed. Call Son lucky, call SoftBank too big to fail. After four years studying the world’s greatest disrupter, my message is unequivocal.
Don’t ever count him out.
‘Gambling Man: The Wild Ride of Masayoshi Son’ by Lionel Barber is published by Allen Lane on October 3
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