Towards the end of the Second World War, a B-29 bomber crashed near the city of Tosu on the island of Kyushu in western Japan. A nine-year-old boy, Mitsunori Son, walked miles to see the crash site, where he placed his hands on the gleaming aluminium fuselage and marvelled at the thick, clear glass of the cockpit. Mitsunori did not care about the bomber’s lethal duty. He was so filled with admiration for it, and the country that made it, that he burst into applause.
It is hardly surprising that Mitsunori dreamed of a better life for his family. As ethnic Koreans – known as Zainichi – they were treated as second-class citizens by a beaten and embittered society. They lived in a tin shack on a dirt path, a few metres from a train line; their home and others near it were routinely burned down by railway workers. They shared the shack with several pigs. Mitsunori’s son, Masayoshi, was born in the shack in 1957. Decades later he would wake in the night, haunted by the smell of coal smoke and pigshit.
Mitsunori would become wealthy, clawing his way into affluence through a string of businesses: the pig revenue supported new ventures in booze, unsecured lending and the compulsive gambling machines called pachinko. But he wanted more for Masayoshi, his studious and intense son. Perhaps, he thought, the boy should become president of South Korea. Masa, as they called him, had other ideas. He was going to become the richest man in the world.
Masa was 16 when he travelled to America, where he completed high school and enrolled at University of California, Berkeley, spending six years in the state. He quickly latched on to a mentor, the professor Forrest Mozer, whom he persuaded to work on his idea for a hand-held translator that would be sold at airports. Son’s ideation was obsessive. He had set himself the task of coming up with new inventions on a daily basis, and the ideas were ranked and categorised using a card system. The translator may not have been the most original idea, but it allowed Masa to find himself: here was a young man who would give everything to the success of his business, who would miss his own wedding – twice! – because he was so focused on turning engineering (mostly done by other people) into money (which mostly stayed with him).
He found, too, that his audacity and self-belief were enough that others would lend him their expertise and their money, and that every person who trusted him could become a stepping stone to something more. When Lionel Barber, the former Financial Times editor, tracked down the now 92-year-old Mozer, he found the old professor still furious: Masa had sold the translator for $1m to the electronics giant Sharp and, Mozer claimed, had given him nothing from the deal.
His first million made, Masa returned to Japan to set up his own company, which he would call SoftBank. Aged 24, with a growing business, he went for a routine health check and was told he had incurable liver disease that could kill him within a year. Here was another test of his dedication to his own success. Many would have accepted their fate but Son disguised his illness from others, employing another man to step in as CEO, and continued to work obsessively as he underwent experimental (and ultimately successful) treatment. He found an engineer, a man called Sakano, among his fellow hepatitis patients and gave the man three weeks to design him a new device that would let him profit from Japan’s newly deregulated telephone market by switching customers between service providers. The little box was a great success, although Sakano did not live to see the proceeds.
As the personal computer and internet booms started to sweep the world, Masa was placed to begin doing business with American entrepreneurs such as Bill Gates. His strategy was to say yes to everything, to buy everything, to advance with an optimism that to others could look like gullibility. As SoftBank grew he would routinely offer to pay far more than a company was worth, sometimes ten times more, and the people would laugh as they took the money, and he would laugh, because even when he told them the truth, they didn’t get it. By the middle of the 1990s, after Japan’s asset bubble deflated, the Bank of Japan was holding interest rates at 0.5 per cent. In an environment of cheap debt, advantage comes from spending more than the competition. American negotiators looked on open-mouthed as he prepared to buy a company for $700m more than it was worth; “You don’t understand,” he told them. “In Japan, money is free.”
It was this approach that allowed Son to buy a third of the search company Yahoo, which he valued at more than ten times the figure arrived at by the company’s other investors. He then demanded to invest another $100m, threatening to give the money to Yahoo’s main competitor if they did not accept. They did, and the value of Son’s stake grew into the tens of billions as Yahoo became the dominant search engine. For a brief period during the very peak of the dot-com bubble, his wealth was growing by more than a billion dollars a day. For about three days he was the richest man in the world.
Then the bubble popped, and he lost an estimated $70bn. This was more money than anyone had ever lost before. And yet the urge to acquire, the unshakeable belief that the future would provide, persisted and was proven correct. Just before the crash, in October 1999, Masa had spent $20m buying just under a third of a small Chinese internet company run by a former tour guide. The business had been running for six months and had never made a profit; less than one in 100 people in China had access to the internet. But Masa liked the name – Alibaba – and the determined inexperience of Jack Ma, its CEO. Again Masa’s optimism was prescient: Alibaba would become China’s answer to Amazon, and SoftBank’s stake would become valued at more than $70bn.
[See also: Masayoshi Son’s inventor complex]
The acquisitions continued: Masa bought the US mobile network Sprint, and in the chaotic aftermath of the Brexit vote he swooped on Britain’s most valuable semiconductor company, Arm. George Osborne met with him on his last day as chancellor.
It was not enough, however, for SoftBank merely to participate in the market. Masa wanted to become the market, for his belief in the redeeming power of technology to spread out across thousands of companies. He had drawn a vision for SoftBank over 300 years, on a scroll, as if it were a religious text. To realise this vision would take vast sums, and for those there was only one place to go: the Middle East. From the sovereign wealth funds of Saudi Arabia and the United Arab Emirates he raised $60bn to invest in promising companies. Among these was WeWork, to whose CEO, Adam Neumann, Masa committed $4.4bn after a 12-minute walking tour of the company’s New York office, which he concluded by telling Neumann – whose stated ambition was to become an immortal trillionaire – that he was “not crazy enough”. The deal was signed in Masa’s car, Neumann got out, and Masa carried on to his next meeting, with Donald Trump.
WeWork would turn out to be a spectacularly bad investment. After the company filed for bankruptcy, SoftBank was estimated to have lost $14bn backing a man who was, as it turned out, crazy enough. Neumann joined a stable of SoftBank-backed visionaries that included Markus Braun, CEO of the German fintech company Wirecard, in which SoftBank invested $1bn (it collapsed into bankruptcy following allegations of fraud); and Lex Greensill, the financier who employed David Cameron as a lobbyist and in whose company, Greensill Capital, SoftBank invested hundreds of millions through supply chain investment funds (until it collapsed into bankruptcy).
But again, these mistakes mattered little in the context of Masa’s ironclad optimism. He had bought all the tickets in the lottery. Something would come up, and of course it did: Arm, the technological crown jewel that Britain had lost in 2016 when Masa bought the company for $32bn and would relist on New York’s Nasdaq stock exchange, seven years later, at a valuation of $55bn. As a chip designer it was perfectly positioned to capture the value of the market’s latest obsession: AI.
Last year, Masa gave a presentation to SoftBank’s shareholders in which he explained that he had a new adviser. In recent months, he said, he had experienced feelings of desolation, as if his career so far had been empty of real meaning. He wept at the prospect. But then he began having long conversations with ChatGPT, and he cheered up enormously, because ChatGPT is a programme for producing the text the user is most likely to accept. The presentation contains a graph in which human progress is a blue line that barely lifts from the horizontal until – “Birth of Superhuman”, the slide proclaims – AI arrives and the curve becomes exponential.
There are no values to say what the line represents. It doesn’t matter, nor do the wild claims on other slides that AI will prevent all natural disasters, solve climate change, end crime, cure all disease and make everyone happy. This is not the real future, this is not what we might think of as a real business. It is a game, the game of saying yes, and no one plays it like Masayoshi Son.
Gambling Man: The Wild Ride of Japan’s Masayoshi Son
Lionel Barber
Allen Lane, 416pp, £30
Purchasing a book may earn the NS a commission from Bookshop.org, who support independent bookshops
Content from our partners
Related
