Initial Concerns on COVID-19:

Masayoshi Son talks about his early concerns regarding the COVID-19 pandemic. Breaking his three-year hiatus from Twitter in March, he expressed worries that the virus was not just a flu, and had the potential to infect hundreds of millions and cause a significant loss of life.

Offering Free PCR Tests:

Feeling that the situation could escalate, Son offered free PCR testing for a million people in Japan, funding it himself. This decision was met with criticism from medical professionals and the public, who accused him of causing panic. As a result, he withdrew the offer.

Switch to Donating PPE:

After facing backlash for the PCR testing initiative, Son pivoted his efforts towards donating personal protective equipment (PPE). He donated tens of millions of masks and protective gowns. While this move was appreciated, he still faced criticism for his earlier offer of PCR tests.

Current Testing Center:

Son now operates the largest private COVID-19 testing facility in Japan. He reflects that maybe he should have been more persistent with his initial offer of PCR tests, as people now see the importance of testing.

Japan’s Handling of COVID-19:

Son believes that Japan’s citizens have played a role in the country’s relatively good standing during the pandemic due to their self-discipline in maintaining cleanliness and wearing masks.

View on the United States:

Son expresses concern for the United States, where the pandemic has been severe. He acknowledges the technological advancements coming from the U.S., like vaccines, but is apprehensive about the situation and is worried for his friends there.

Short-Term Pessimism, Long-Term Optimism:

Masayoshi Son expresses a dichotomy in his outlook. He is optimistic about the long-term prospects, particularly citing advancements in vaccines and medical antibodies. However, he tempers this by stating he is pessimistic in the short term due to current uncertainties in both the global situation and the U.S. elections.

Peering Over the Cliff Edge:

Son delves into what he meant by “peering over the cliff edge” earlier in the year. He talks about his concerns for the economic crisis affecting jobs, health, and life in general. He also acknowledges the risks faced by many start-up companies in which his firm, SoftBank, has investments.

Liquidity as a Safety Net:

In preparation for what he deems could be a worst-case scenario, Son reveals that SoftBank aimed to create an internal cash reserve of around $41-42 billion by liquidating assets. The company exceeded this target, amassing almost double the amount. This pile of liquidity is designed to serve as both a safety net for SoftBank and its investments, as well as a resource for future opportunities.

Preparing for Worst-Case Scenarios:

Son elaborates on what these worst-case scenarios might look like. He cautions that before the mass production and distribution of vaccines, there could be significant economic events akin to the Lehman crisis that precipitated the 2008 financial downturn. This informs his decision to maintain a high level of cash on hand ($80 billion).

Technology Companies and the Paradigm Shift:

He notes that technology companies have generally fared well during the pandemic. With more people working and studying from home, companies that have either completed or are leading in digital transformation have benefited. They have adapted quickly to the paradigm shift accelerated by the pandemic, often even achieving record high net income.

Investment Strategies with $80 Billion:

When questioned about what he plans to do with the $80 billion cash reserve, Son describes it as “many optionalities.” He is open to using it either as a rainy day fund for his own companies or as capital for acquiring other assets, especially in AI front-end companies. The strategy appears to be deliberately flexible, allowing for aggressive investment when opportunities arise.

Investing in Unicorns and Buybacks:

Masayoshi Son believes that it is a favorable time to invest in unicorns, especially since they need funding. He is also a proponent of buying back his own company’s shares, particularly when the share price drops. In March, his company’s share price fell by nearly 70%, presenting what he saw as a prime opportunity to buy back shares at a significant discount to their underlying asset value.

Dealing with Mistakes:

Son divides people into two categories when it comes to mistakes: those who don’t admit their mistakes and those who do. He identifies himself in the latter group, seeing acknowledgment of mistakes as an essential step to learning and improving. He doesn’t dwell on mistakes but finds it important to accept them to become smarter.

Case of WeWork:

Son acknowledges that the WeWork investment was a mistake and sees it as a learning opportunity. He still has high regard for Adam Neumann, WeWork’s co-founder, believing that he has a lot of potential and could be successful in the future. Despite the loss in WeWork, Son is optimistic about other investments in his vision fund.

Investment Focus:

SoftBank has always been focused on the “information revolution,” and now its emphasis is on the AI revolution. He believes that both unicorns and big tech companies like GAFA (Google, Amazon, Facebook, Amazon) will be the front-runners in this AI era. Thus, he is open to investing in both private and public companies that align with this vision.

Missed Opportunities:

Son expresses regret for not investing in Amazon when he had the chance. He and Jeff Bezos were close to a deal before Amazon’s IPO, but the deal fell through due to a relatively small disagreement on valuation and a lack of available funds at the time.

Investment in Big Tech:

Son confirms that he has invested and plans to continue investing in big tech companies like Amazon, Google, and Facebook. He believes these companies will be the champions in the upcoming AI era. He likens building a successful investment portfolio to creating a winning baseball team; it should include both promising new talent and established stars.

By unpacking his investment philosophy, lessons from past mistakes, and future focuses, Masayoshi Son provides a comprehensive look at his strategic thinking in both entrepreneurial and investment realms.

Scale vs. Regulation:

Masayoshi Son discusses the regulatory environment in the United States concerning big tech companies. He acknowledges that some of these companies might be operating in ways that could be considered unfair but suggests that this is not generally intentional. Rather, it could be due to errors made by their employees.

Breaking Up Big Tech:

Son is against the idea of breaking up these companies simply because they are large. He argues that size and power are not necessarily bad things. These companies are often at the forefront of innovation because they can afford to take significant risks on research and development. Son stresses that curtailing the growth of these companies could potentially stifle innovation.

Respect for Leaders:

When asked about specific companies, Son doesn’t name any but mentions that he has great respect for various leaders in the tech industry, such as Jeff Bezos, Mark Zuckerberg, and Elon Musk, among others. He believes their contributions to innovation are incredibly important for humanity.

Global Stage and Chinese Regulation:

Son avoids commenting directly on regulatory efforts in China, arguing that each country has its own logic and environment that they believe is good for their citizens and industries. He also acknowledges the argument that U.S. companies need to maintain their size to compete globally.

Universal Goals:

Finally, Son emphasizes that the primary objective should be innovation for the betterment of humanity, such as disease fighting or disaster recovery. He believes companies striving towards such goals should be respected, irrespective of their size or nationality.

Splintering Internet:

The issue of a “splinternet,” or multiple internets existing due to diverging regulations and technological ecosystems, is raised. While Son doesn’t directly address this concern, it stands as an important point given his emphasis on universal goals and global competition.

Optimism About Dialogue:

Masayoshi Son expresses his optimistic viewpoint that despite issues and debates, people can ultimately find solutions through discussion. He believes that open dialogue leads to better outcomes and that people can find a “good ending.”

TikTok and Political Concerns:

When asked about the Trump administration’s move to block TikTok in the United States, Son describes it as sad, especially if the move stems from unfounded political concerns. He mentions that he has spoken to Yimin, the founder and CEO of TikTok, who has no intentions of compromising privacy or national security.

Technical Solutions to Security Concerns:

Son argues that most concerns, including national security, can be addressed through technical solutions. He cites the example of storing data on servers located within countries concerned about national security. He also mentions Oracle’s role in ensuring national security, highlighting that there’s always a technical solution for people’s concerns.

Real Risks vs. Perceived Risks:

Son states that he does not believe there was a significant actual risk regarding national security with TikTok. However, he acknowledges that public concerns should not be ignored and that instead of endless debates, technical solutions should be sought to allow people to continue using the services.

Hardware vs. Software Security:

When the discussion moves to hardware security, specifically concerning Huawei, Son’s stance remains consistent. He believes that if there are specific concerns, they can be mitigated through technical solutions rather than becoming overly political issues.

General Belief in Goodness:

Son iterates that he is in the “camp of believing people’s goodness,” implying that constructive solutions can be found if there’s a willingness to discuss and address concerns rather than resorting to conflict or “hating each other.”

Luck and Opportunity:

Masayoshi Son acknowledges the role luck has played in his career, particularly in meeting Jack Ma and investing in Alibaba. He is grateful to both circumstances and the hard work of the people involved for the success they achieved together. However, Son also views life as a “roller coaster” where both luck and misfortune come in cycles.

Responsibility in Business:

According to Son, it’s not just about encountering opportunities but also about seizing them. When fortunate situations arise, one should work hard to capitalize on them; when challenges come, one should work equally hard to overcome them. He asserts that over a long period in business, such as 40 years, the end result is largely one’s own responsibility.

Bitcoin Experience:

Son details his personal investment experience with Bitcoin. He initially invested 1% of his assets based on a friend’s advice, but found that it distracted him from his primary focus on his own business. As a result, he opted to sell his Bitcoin holdings at a loss, stating that the freedom from distraction made him “feel so much better.”

Views on Digital Currency:

When asked about the future of digital currencies like Bitcoin, Son believes they have a place, but he is uncertain about which digital currency or structure will prevail. He stresses that he would rather focus his attention on something he is passionate about, which currently is Artificial Intelligence (AI).

Focus and Long-term Vision:

Son emphasizes that his primary interest is in AI and he wants to concentrate solely on that. Even though he acknowledges the future utility of digital currencies, he chooses to focus on what he understands deeply and feels passionate about, reiterating the importance of focus in achieving long-term goals.

Evolution of Jobs:

Masayoshi Son speaks about the evolving role of artificial intelligence (AI) in the job market. He refers to the emergence of a “metal collar” class, signifying jobs that will be replaced by robots and AI. These include not just blue-collar jobs but white-collar roles as well. The automation of these tasks would lead to fewer working hours for humans, potentially making the standard 8-hour workday obsolete.

Quality of Life & AI:

Son suggests that as AI takes over more labor-intensive tasks, humans can focus on activities that are more “human-like.” He highlights the evolution from times when fetching water was a laborious task to the present day when basic necessities are more easily accessible. This trajectory is expected to continue with AI and robotics further alleviating daily ‘hassles’.

Learning Entrepreneurship:

When asked if entrepreneurship is innate or learned, Son advocates for the latter. He believes opportunity exists for everyone and that mindset and effort are the determining factors in seizing that opportunity. His personal story, beginning from a home with no official street number, serves to underline the point that entrepreneurship is accessible to all.

Market Bubble & AI’s Future:

Son tackles the question of whether there is a market bubble in technology, particularly around AI. He contends that even if there may appear to be a bubble in the short term, the long-term prospects of AI are so transformative that what seems like a peak now may be just the beginning. Son emphasizes that the “AI revolution” is in its infancy and has much more room for growth.

SoftBank’s Success:

Son mentions SoftBank’s exponential growth as evidence supporting his long-term optimistic view of AI and technology. He compares SoftBank’s asset growth over 18 years to major stock market indices to show that his approach is not merely speculative but has produced tangible results.