What Drives Billionaire Masayoshi Son?

Billionaire Masayoshi Son has a vision for the future of the world. But what does that vision look like? Lionel Barber is the former editor-in-chief of The Financial Times and author of the book Gambling Man: The Secret Story of the World's Greatest Disruptor, Masayoshi Son.

In this podcast, Motley Fool host Ricky Mulvey caught up with Barber to discuss:

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• Son's instincts as a salesperson and investor.
• Why the founder is still driven by his roots.
• Questions for anyone who's tempted to put their life savings into SoftBank.

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A full transcript follows the video.

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Lionel Barber: It's a vision of a society transformed or soon to be transformed by artificial general intelligence. I think he's now talking about superintelligence, where I mean, frankly, the robots are going to be smarter than the human beings and they're going to take over an awful lot of task. What he wants to do is insert himself in the middle of his system.

Mary Long: I'm Mary Long and that's Lionel Barber. He's the former editor in chief of the Financial Times, where he worked for several decades. He's also the author of the new book Gambling Man, a biography about Masayoshi Son, the storied founder and CEO of SoftBank. My colleague Ricky Mulvey caught up with Barber for a conversation about what makes Masayoshi Son tick, his skills as a salesperson, life at the Vision Fund and some important questions for anyone who's tempted to put their life savings into SoftBank. Heads up that this interview was recorded in early January before it was announced that SoftBank would be working to fund Stargate, the joint AI infrastructure venture between Open AI, Oracle and others. That announcement doesn't change any of the information shared in this conversation, but we think it does make it all the more relevant. We hope you enjoy Fools.

Ricky Mulvey: As we dive into your biography, there's plenty of current events to talk about with Masa Son, but there is an easy place to start with your book because you describe him as a Fool with the F, as a jester. For the Fools listening, I know they'll be interested to hear why. It's something we take seriously here at The Motley Fools. You want to be Foolish with a F. So why is Masa Son a Fool?

Lionel Barber: Well, in the Great King Lear tradition, the fool is the person who speaks truth to power. But also is the fly in the ointment. In Japan, which is a very hierarchical society, top down, they're very ordered. They don't like people who take big risks. Masa is the person who is running counter to the mainstream. In that sense and it was actually me quoting a top Japanese businessman who said, he is the jester, Joshi Dosoki, which it's a terrible Japanese accent, to describe that role of the outsider who runs against the current. Praise be the Fool.

Ricky Mulvey: I think there is something interesting that changes in this because there is a part where he is the outsider and he is the Fool where he's very little known. Then later he becomes someone comparing himself to Genghis Khan and even maybe Jesus Christ, at which point, I don't know if you can say that person is a Fool anymore. You're definitely in the inside once you're making those comparisons to historical figures.

Lionel Barber: Yeah, Napoleon, let's not forget him. He was also so small, and he was also an outsider, Corsican, who became the Emperor of France and the Emperor of Europe. Masa is an empire builder. Remember, he's got businesses which stretch across the globe. He invested in Alibaba in China. He invested in Yahoo in America. He built a computer publishing business. He's got big assets in Britain. This is a guy who really does see himself in historical terms, but also he is somebody who loves to make sure that people underestimate him. In that sense, casting himself as a bit of a joker and a Fool is a good way to throw people off the scent.

Ricky Mulvey: We'll go to the cover now of your book, which is that you give them this heavyweight title, the champion, the world's greatest disruptor. You could put a few people in that category. Steve Jobs, Walt Disney, Elon Musk, Nikola, Tesla, Henry Ford. I'm sure I'm baiting you with some of those names, but why give him that heavyweight championship belt of the world's greatest disruptor when this is someone. He built an empire. He got more money into a fund than anyone else before, but he didn't invent anything. He wasn't building electric cars. He wasn't bringing light bulbs to America or the world.

Lionel Barber: Yeah, he's not Steve Jobs in that he didn't produce the Apple Mac or the iPhone and these fantastic products. He's not Henry Ford, the great manufacturing innovator. But you don't have to be that. You can be a middleman. You can be the gateway for technology to come into Japan and then you can take on the colossus. No mean thing, NTT, Nippon Telegraph was the most valuable company in the world in 2000 in Japan. Look, he then smashed up the party in Silicon Valley, in the venture fund industry. You could say he was hosing away billions and he lost away money. But in that sense, I think he deserves the title of the world's greatest recent disruptor, not least because he's not very well known and that's the big secret about this book.

Ricky Mulvey: He is someone should be known, but when we talk about great investors on the show, we often go to folks like Warren Buffett or even Benjamin Graham. It's that older school value investing style approach. You say that basically you write I shouldn't say you say basically. You write directly that, "His instincts as an investor were far superior to his skills as a traitor." There's two questions there, Lionel. First, what made him, in your view, a great investor that deserves more attention in that regard?

Lionel Barber: Well, he was the richest man in the world in February 2000 for three days. But he got to the top and he came back and he's had several moonshots that have come off. Take Alibaba. He spent 20 million then 80 million, $100 million bet turns into $130 billion. He didn't sell out like Goldman Sachs. He bought ARM Holdings, which is this, by the way, going to be the vehicle for developing the super chip to rival Nvidas. ARM, he paid $32 billion. It's now worth 140 billion. Not bad. Similarly, Yahoo, he invested in early and as a result, was able to invest during the.com bubble in 400+ companies. I think he has been a very good investor with a couple of caveats. We work. We're not going to skate over that. I don't. Also, just to be clear, Ricky, I think he is not Warren Buffett. Warren Buffett is a far superior investor, much more savvy and has not had these wild ups and downs that Masa and significantly and I describe this in detail, when Masa goes all the way to Omaha on a Sunday, arrives there to see Warren Buffett and asks him to invest in the Vision Fund, Mr. Buffett says, no, thank you, after about 20 minutes.

Ricky Mulvey: Yeah.

Lionel Barber: Long way to go around the world.

Ricky Mulvey: I want to get to his skills as a salesperson in a bit. One of the things that also we focus on here at the Fool is you want to be good at investing, but you're not a traitor. So we'll get to the trading side of this. What makes Masa Son a less great traitor?

Lionel Barber: Well, if you look what he did when he was trying to mount a comeback during the COVID pandemic, where he almost got wiped out. Had the WeWork losses, he sets up this in house hedge fund and starts trading billions on options trading. Futures, derivatives. By the way, he's just also sold out on Nvidia. He did have 5% of Nvidia back in 2017 '18, he sells out in '19. He would have made a lot of money, he'd stuck with that. But this options trading, he makes 7 billion in a few weeks and then he runs up losses of I don't know. SoftBanks very sensitive about this. Some say as much as 9 billion, I'm going net he's down 6 billion in a matter of months. That's pretty bad trading.

Ricky Mulvey: Yeah. The thing that he is truly great at and I want to make sure we stay on this for a bit is his skills as a salesperson. You mentioned that he was not able to get Buffett's attention when he flew out to Omaha. Warren Buffett very polite, giving him a tour of the headquarters. I think he got to meet all 12 people at the Berkshire Hathaway office.

Lionel Barber: I think he only met Mr. Buffett, who was there, especially there on a Sunday. Nobody else was in the building, as far as I could tell.

Ricky Mulvey: Yeah. My bad. However, he is able to get a lot of money from Mohammad Bin Salman. If I were I'm not saying I am. This life might be nice. I think it would be difficult, but it might be nice. If I were royalty in the Gulf and Masa Son has come to meet with me to try to get me to give him billions and billions of dollars for the Vision Fund, what's that meeting life like? What's he telling me to give up those billions of dollars?

Lionel Barber: The secret to success can be summed up in four letters. FOMO, the fear of missing out. With the crown prince of Saudi Arabia, Mohammad Bin Salman, that's what he does. He says, if you invest with me, I'm going to introduce you to all the significant movers and shakers in the tech ecosystem, you'll get in early with the likes of Uber and Lyft and all these companies growing up in Silicon Valley. Mohammad Bin Salman, MBS, as he's known, is desperate to modernize the desert kingdom, win himself, win the country off oil and he wants to modernize. He sees Masa positions himself as the modernizer and if you don't give me the money, by the way, I am going to ask you for $45 billion. He thinks I'm going to miss out. I'm prepared to spend that money. By the way, if you've got the public investment fund from Saudi Arama going public and that's what you want to sell to investors, you're going to raise a couple of trillion, then maybe $45 billion is chump change. Maybe not quite.

Ricky Mulvey: I would have a difficult time saying anything in the tens of billions is chump change. In the lower numbers of billions, sure, we can call that chump change. One of the things, though, is there are savvy players on both ends of this and one of the things that the Vision Fund has is that it basically functions as a dividend stock, where it's paying its limited partners a fixed 7% regardless of fund performance and for those listening, a 7% dividend, you're talking about old school companies. You're talking tobacco stocks. You're talking Verizon, Pfizer. These are these high dividend companies and you don't see a lot of high growth tech companies paying out large dividends like this. There tech companies paying smaller dividends now, but these large dividends are not paid out because a lot of these companies need room to run to make mistakes and to chase high growth opportunities. Why is this promise put into the fund?

Lionel Barber: Well, Ricky, you've actually nailed the key point about the Vision Fund, which is, that even though the Saudis and by the way, also the Gulf States, the UAE or United Arab Emirates, that's Abu Dhabi, better known as Abu Doshi, they want to get into the tech business and in these stocks. But they want some security. That 7% coupon, dividend annually, guaranteed. That's their security and anything else is on top of that. But second point he therefore is actually very quite stretched. It also means that it's not a classic venture fund because venture funds don't give that guaranteed return. It's supposed to be, it either works or it doesn't. That's the third difference is, guess what? We work that they invested in he won't let it go bankrupt. When the IPO is called off, Masa says, OK, I'll make you sweet to the Gulf investors. All this actually means that although he was competing with Silicon Valley venture funds and force feeding these companies with cash, it wasn't at all a classic venture operation.

Ricky Mulvey: When you said it stretched the fund, what does that mean at a granular level for the lieutenants that are trying to make these investment decisions? It SoftBank, when they have to get this constant 7% yearly return for their investors?

Lionel Barber: Very simply, it means craziness. It means ill discipline. It means that the investors, believe it or not and I report this in the book, we're actually latterly being measured about how much money they were putting out through the door. Rather than looking at returns. It was all done in a tremendous rush, as one of the top SoftBank Vision Fund people told me. Do you know something, and we're going to talk about this, what he's doing now, I think he has drawn some lessons from that hubristic period of the Vision Fund, 2016-2022.

Ricky Mulvey: We can get to that because one of the things throughout Masa son's career that he is intensely skilled at is creating a vision and having people buy into that vision. Directionally, he's been correct on a number of very big things about mobile Internet telecoms in Japan, the Internet and his deals with Yahoo and creating basically seeing what's going on in Silicon Valley and creating distribution deals in Japan. Then beyond that, even with computer trade shows, where he understands the overpaying for networking may not be overpaying if you're running the networking show. Now the vision is AI. He says, $100 billion is coming into the US. You have our president Donald Trump saying, we'd like $200 billion. Why not negotiate that way? When you talked to him, you interviewed him for the book. To the best you can, what is his vision for AI? What's the Masa Son vision of AI over the next few decades?

Lionel Barber: Well, I want to talk about AI, but let me just reinforce what you were saying, which is quite right, that he's ridden this technological wave, and he's been fundamentally right about the direction of technology, which has shaped modern societies irreparably. He's like, we talked about him being the Fool, but I think he's more of a forest gum like character who's there always at either the microchip or the Internet, mobile Internet. Venture capital, turbo charging these companies with money. Now it is AI. In the conversation that I had with him in Tokyo, the fourth interview, he sketched some of the vision. Really, it's a vision of a society transformed or soon to be transformed by artificial general intelligence. I think he's now talking about super intelligence. Where I mean, frankly, the robots are going to be smarter than the human beings and they're going to take over an awful lot of task. What he wants to do is insert himself in the middle of this system.

There's going to be a lot of focus on logistics, autonomous vehicles, distribution, robotics. He's investing in these companies all around the world, particularly in America, though. I think the other big play, which we're going to hear a lot about in 2025 is the development of a superchip to rival Nvidia's. We know that Nvidia has transformed in the last 10 years into a company worth, $3 trillion plus. I'm not saying that Masa will get to that scale, but he certainly wants to get into that business of Superchips to power the AGI revolution.

Ricky Mulvey: What's interesting is he doesn't want to do that by investing in a public company that may be doing that already Nvidia. It reminds me of a story when he wanted to invest in Yahoo in the earlier Internet days and Jerry Yang is trying to turn him down. Masa Son wants to overpay and basically, he says, you know what? If you don't want me to invest in your company, I'm going to bring up this other company and just try to kill you. I wonder, looking at his history and seeing what's going on with this next Superchip, do you think a little bit of that's going on with him trying to create the new chip for artificial super intelligence if he's not investing in Nvidia?

Lionel Barber: Well, you have to remember, Ricky, that the big vision in 2018, '19 was to merge Nvidia with ARM Holdings, which was the designer, the British based, it's got a big operation in California. Designer of huge numbers of different chips supplied to the likes of Apple Qualcomm. He wanted to merge the design expertise of ARM which was a supplier to all the major big tech companies. With Nvidia that would have these advanced graphics chips, so it was a horizontal and vertical integration play. When regulators block that, he's now saying, I'm actually going to compete. But I think he's also a frenemy of Nvidia. He's never going to go head to head. He likes the frenemy game.

Ricky Mulvey: You mentioned that you interviewed Masayoshi Son four times. You've interviewed a number of world leaders and one of the things you like to do when you're interviewing a big dog is you got to get their attention. You want to unlock him and you want to get their attention. One story I've heard you tell before you interviewed Vladimir Putin and you started speaking to him in German because he was a KGB agent in Germany and you knew that he spoke German and he took it with stride. He wasn't surprised. He was just able to handle it. When you're talking to Masayoshi Son, how are you getting his attention?

Lionel Barber: Well, the first time I turned up in Tokyo, I was told he was too busy to see me. Initially, I took that as a bit affronted. But then I said, get over it. You're not the editor of the FT anymore and use the time to your own advantage. What I was able to do was I said to the SoftBank people, I'm going to Kyushu on where he was born. Remember, it's crucial to understand that he came from a Korean immigrant family. He is an outsider. This is all about where he gets his motivation. By walking around Kyushu for two days and by the way I would have gone by car, but I didn't have a foreign driver's license. Then I found out my researcher, who's Korean Japanese didn't have a driving license. I wore out a pair of shoes in Kyushu. But crucially, when I did the first interview, I was able to immediately say, I went to your school and I remember hearing Kurum and that got his attention. Like, this gigan, this foreigner has bothered to actually examine my roots. I think that unlocked helped to unlock him.

Ricky Mulvey: How do you think his roots are still drive, he's pushing tens of billions of dollars into high tech companies. He still has this background of I've heard you bring up the book Pachinko before, which is appropriate. It's a Korean immigrant to Japan, family opening a Pachinko parlor.

Lionel Barber: Slot machine parlor, yeah.

Ricky Mulvey: Yeah. But even in these later years, how are you seeing that tough upbringing driving him?

Lionel Barber: You have to remember that the Japanese corporate establishment regards this guy with great suspicion. They don't particularly like him because he's a disruptor, but they also don't like him because he's Korean. He comes from a Korean immigrant families. His grandfather came over in 1917. His grandmother, who's very influential figure, came out in the late '20s. This was a time when Korea was a colony of Imperial Japan. There's still racial prejudice in Japan and even though he's made his money and he's as rich, maybe sometimes the richest guy in Japan, sometimes it's Mr. Uniqlo, the fast the retailer. That's really why he wants to drive home that I've seen the prejudice. I suffered it as a kid. The only way I escaped it was to go to America. Where he did spend five years plus six years, 5-6 years as a student, latterly at Berkeley, where he did a degree and he majored in economics, and that's where he set up his first business. For America was a great liberation to it. But guess what? He went back to Japan because he wanted to essentially stuff those Japanese. I'm actually going to show that I'm going to be the big guy. I think he really still wants to be that, the great global figure in Japan still feels probably a little bit underestimated, given his role, I think, and that's a big motivation. I want to be Number . He kept saying it to me.

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Ricky Mulvey: As we wrap up this part of the conversation on SoftBank and Masa Son, a lot of people have put a lot of money into SoftBank. His longtime confidant, Ron Fisher, put his entire family's net worth into SoftBank when he just got started working there. That ended up working out fabulously well for him for a number of reasons. But that was a while ago. Let's talk about today. Let's say I'm considering a similar move. Maybe not my whole family's net worth, but let's say half. I want to give half. I'm thinking about giving half my family's net worth to Masayoshi Son because he's going to invest it for the next five to ten years. You've researched this investment organization. You've researched Masayoshi Son for a while. This is enough to make me sweat if it all goes poorly. My life could be changed if it goes downhill. What would you say to me?

Lionel Barber: I'd say, how strong is your stomach? Have you got iron filings in the stomach? Mixed with maybe a little bit of milk because you really do need a strong stomach to stay with SoftBank, you got to go through what I described in the title as the wild ride in this company. You're going to have real gyrations. You're going to have the highs and the deep lows. Stick with it over time, you're probably not going to do much better than the S&P, maybe a little bit worse over, say, the last 10 years. I would buy on the dip. That's what he told everybody, by the way, when he lost 97% of his wealth in 2000 he actually seriously went out to Japanese investors and said, now's the time to buy and it would have been a good buy. Amazing to me how Japanese retail investors have stuck with him. He's got a lot of loyalty. Maybe that's partly because he's got that joker quality that you described at the beginning. People like him. But I wouldn't put all my savings and I might put some.

Ricky Mulvey: I'm going to move on to a few other topics while we have a little bit of time as we wrap up here. You mentioned something earlier when we were talking before the interview, one of your concerns as we move over across the Atlantic Ocean over to Europe is that you're concerned that Europe is a museum. Is Europe a museum? I'm hoping you can expand on that question and where it comes from for you.

Lionel Barber: Well, I'm using a phrase that was around in the Clinton administration in the Treasury at the time, Bob Rubin Larry Summers, and I think that's how they described it. Of course, we've got great museums, the Louvre, Uffizi, British Museum, but we do have a few other things. The reason that we call it or risks becoming a museum is that as engine of innovation and technological innovation and venture capital, deep capital markets, we are being left behind by a turbocharged America. The industrial policy adopted by the Biden administration offering billions of subsidies, that's drawn European companies to shift operations into America. Also now the drill baby drill philosophy. When Europe still committed to net zero, climate change, we take very seriously. We're going to therefore be at an energy disadvantage. This is the danger of why we might become a museum. We're not quite yet, though.

Ricky Mulvey: Is there any great pieces of financial journalism or great stories that have been on your radar that you've been thinking about lately?

Lionel Barber: First great story is the future of Indian capitalism. The Adani empire to rival Mukesh Ambani who created, he's huge multi billionaires in energies and mobile Internet and everything. But Adani was a great beneficiary of the Modi government. He's in big time in public sector infrastructure. But that report by Hindenburg, which devastated the share price has rocked Adani. Now the stock market's fall a little bit in India, and the growth may be a tailed-off. Big question about India in 2025. I think the other story which I would just focus on more and more is just the role of private markets and the eclipse of public markets. It's really being seen in the city of London. You're seeing people migrating to New York and just writing more about private markets would be something I would focus on.

Ricky Mulvey: Lionel Barber, book Gambling Man, happy to recommend it to listeners of Motley Fool Money. Well researched and it's going to give you a great look at, as you said, an investor that maybe hasn't gotten enough attention. Thank you for your time, for your insight, and for joining us on Motley Fool Money.

Mary Long: As always, people on the program may have interest in the stocks they talk about and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and are not approved by advertisers. The Motley Fool only picks products that it would personally recommend to friends like you. I'm Mary Long. Thanks for listening. We'll be back on Monday.

Mary Long has positions in Shopify. Ricky Mulvey has positions in Shopify and Walt Disney. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Goldman Sachs Group, Nvidia, Oracle, Pfizer, Qualcomm, Shopify, Tesla, Uber Technologies, and Walt Disney. The Motley Fool recommends Alibaba Group and Verizon Communications. The Motley Fool has a disclosure policy.