A Japanese billionaire may be the big winner in a plan to create 50,000 American jobs.
When President-elect Donald Trump on Tuesday announced that Japanese corporate giant SoftBank had agreed to invest $50 billion in the U.S. and create 50,000 new jobs, he presented it as a triumph for American workers. But economists and analysts who have been scrutinizing the announcement suggest it might be a bigger win for the Japanese telecom and internet conglomerate, SoftBank, and its billionaire founder, Masayoshi Son.
Analysts said the Japanese telecom and Internet conglomerate could be angling for lucrative benefits, including the regulatory approval to carry out one of the largest telecom mergers in recent history, between Sprint, which SoftBank owns, and rival carrier T-Mobile. It could also be cultivating a friendly environment for further tech investments Son is seeking to make in the U.S.
“I think Son must have thought how to use Trump and this opportunity” for his business, said Mana Nakazora, chief credit analyst at BNP Paribas Securities.
Shares of SoftBank Group Corp. rose 6.2 percent on the Tokyo Stock Exchange on Wednesday to close at their highest level in more than a year. Shares of Sprint Corp. rose nearly 9 percent on Wednesday, while TMobile’s stock climbed more than 4 percent. Collectively, the companies added billions of dollars in market value after the announcement.
Trump said on Twitter on Tuesday that Son said he would not have made the investment if Trump had not won the election.
But analysts said that the $50 billion investment would likely come from a $100 billion fund created by SoftBank and the Saudi government — Son said as much to the Wall Street Journal — and that much of the fund might have been destined for the U.S. anyway.
SoftBank announced in October that it would dedicate at least $25 billion toward the $100 billion so-called SoftBank Vision Fund to invest in global technology companies in the next five years. Saudi Arabia’s public investment fund pledged to invest up to $45 billion in the same time period, with the additional $30 billion coming from outside investors.
“Son must have intended as much as half of the Vision Fund to go to the U.S., as he’s aware that there are great companies in Silicon Valley. But he chose this time to announce it as Trump is now going to be the next president,” said Jun Tanabe, a SoftBank analyst at JP Morgan Securities in Tokyo.
A SoftBank spokesperson declined to comment whether the funds would be coming from the SoftBank Vision fund or give further information regarding the investment. Trump’s spokesperson did not respond to requests for comment.
Analysts suggested it would be difficult to deploy $100 billion in investment in global technology without looking largely to the U.S. and Silicon Valley. In 2015, for example, venture capitalists invested $148 billion worldwide in 8,381 deals, according to consulting firm EY. The U.S. accounted for roughly half of that investment.
“In 2016 so far, about 60 percent of all venture capital in the world has gone to the U.S.,” said Jeff Grabow, U.S. venture capital leader for EY. “The U.S. would be the first place anybody would look.”