Masayoshi Son is a 60-year-old Japanese entrepreneur: you have probably never heard of him, because he is not particularly famous and does not have a Wikipedia page in Italian. But he is the richest man in Japan, one of the richest 100 in the world and above all the one who, according to many, will have a decisive role in the technological evolutions of the coming decades. Son is in fact the man behind the Vision Fund, an investment fund worth over 100 billion dollars that is changing the ways and measures of investments in technology companies. Time magazine chose him among the 100 most important people of the year: in the “Titans” category, along with people like Oprah Winfrey and Elon Musk. The Economist, who spoke about it in two recent articles, wrote that it could become as important as Jeff Bezos, Jack Ma and Mark Zuckerberg.
Son, a Japanese of Korean descent, is the founder and current CEO of SoftBank, a major Japanese conglomerate that started in telecommunications and then expanded into other technology companies. In the 1970s he went to California to study – economics and computer science at Berkeley – and said he did after McDonald's then Japanese president advised him to learn English and get into computers. As a student he developed an electronic translator, which was then sold for $ 1.7 million to Sharp Corporation, and managed the import of video game consoles from Japan for a few months. He founded SoftBank in 1981, when he only had two part-time employees. He told them that over the next five years the company would sell merchandise worth at least $ 75 million. They resigned, not believing him, but the company was successful and distributed up to 80 percent of PC software in all of Japan.
Son then moved on to investing in other companies – including Yahoo! in 1995 and Alibaba in 1999 – and around 2000 there was a time when he was richer than Bill Gates. Then, due to the effects of the “dotcom” bubble (or “bubble of the new economy”) it lost a large part of its capital and SoftBank lost 99 percent of its market value. But thanks to the 20 million dollars invested in Alibaba, which in those years began to become the immense company it is today, it managed to stay afloat. The Economist wrote that its investment in Alibaba is still considered one of the best ever: 28 percent of Alibaba's shares owned by SoftBank are now worth around $ 140 billion.
The Vision Fund is the main investment fund managed by SoftBank. The Economist wrote that “it is the result of an unusual alliance, made in 2016, between Son and Muhammad bin Salman”, son of the king of Saudi Arabia, defense minister, crown prince and creator of the “Vision 2030” plan, which aims to make Saudi Arabia independent of oil market trends by 2030. Muhammad bin Salman (often just called MbS) has invested $ 45 billion in the fund. Other important investments in the fund come from Apple, from an Abu Dhabi sovereign fund and, for 28 billion dollars, directly from SoftBank: all for about 100 billion dollars. To make a comparison, the Economist wrote that in 2016 venture capital funds (those that invest venture capital to start or grow companies operating in sectors with large growth margins) had a total value, worldwide, of 64 billion dollars.
In addition to being larger than any other similar investment fund, Son's Vision Fund is also very different in how it operates. And it has everything to do with Son, who is considered unscrupulous, a staunch supporter of the theory of “singularity” (short version: the one according to which artificial intelligences will eventually take control of humanity) and why, wrote the Economist , “It acts quickly, on a scale that no other investor feels like operating”.
The Economist pointed out that, even if it were to fail, the Vision Fund would still have decisive and lasting effects on the technologies in which it invests. Because Son is choosing to invest in “frontier technologies”, which have to do, for example, with robotics, artificial intelligence and the internet of things, and he is doing it by putting a lot of money, immediately, in many companies. Other funds tend to invest little by little; Son, on the other hand, is known for putting in a lot of money right away (often even more money than the companies he invests in). Nobody can put as much money as Son, and nobody is as unscrupulous as he is: his investments are therefore decisive in deciding which company suddenly becomes the most important in a “technological frontier”. As the Economist wrote, “even if Son's bets weren't successful, his money would still affect the game.”
Vision Fund investments are different from others also because they are particularly diversified geographically: Son invests in American companies, in Silicon Valley, but also puts a lot of money in European and Asian companies or startups.
Son said that just as Steve Jobs succeeded with Apple in combining art and technology, his purpose is instead to combine technology and finance. He also explained that he wants to create a “virtual Silicon Valley” with SoftBank and the Vision Fund. That is, it wants to create a network of investments in different companies, from different technological areas and from different areas of the world, so that each can integrate with the others in an ecosystem that offers benefits to all. To do so, he is also willing to influence the operations of certain companies: for example, he encouraged Uber (in which he has invested) to sell its Southeast Asian operations to Grab, another company in which he has invested. The Economist wrote that in addition to offering money – lots of it and immediately – Son gives the companies in which he invests the possibility of being part of a “family”, of a “collection of the greatest new technology companies”.
The Economist wrote that the Vision Fund is giving companies an alternative to being acquired by Facebook, Apple, Google or, in the case of China, Baidu or Alibaba, and that this is good. But there are also problems because “power doesn't necessarily mean success”. Vision Fund continues to spend, in fact, and the more it spends, the higher the revenues must be: already now more than half of its capital is made up of borrowed money. In order to be able to return from all its investments, the Vision Fund needs at least some company it has invested in to do absurdly well, and this is not necessarily the case.
There are those who believe that the Vision Fund will eventually fail and there are also those who fear that with its too high investments, perhaps in the wrong company, it will make it impossible for other startups with better ideas but less money to be born and grown. The Economist also wrote that, as technologies and investments of this type and magnitude work, “a verdict on the Vision Fund will come in several years. But it is certain that the fate of many startups and the choices that many consumers will make in the future will be guided by the bets Son is making today “.
