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You are here: Home / Innovation / SoftBank Vows 50,000 New Tech Jobs
SoftBank CEO Promises Trump 50,000 New Tech Jobs
SoftBank CEO Promises Trump 50,000 New Tech Jobs
By Jef Cozza / Sci-Tech Today Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
The holding company that owns the Kansas-based Sprint Corp. has pledged to invest up to $50 billion in U.S. startup companies and acquisitions. This vow was made by Masayoshi Son, chief executive of SoftBank Group, which owns Sprint. Son made the promise following a 45-minute meeting with President-elect Donald Trump yesterday.

Son (pictured above) said SoftBank will make the investment from a $100 billion technology fund that the company previously said it would raise in part using its own capital and commitments from the Saudi Arabian sovereign wealth fund. First announced in October, the SoftBank Vision Fund will create as many as 50,000 tech jobs in the U.S, according to Son. The fund will also invest in a number of other countries around the world.

Big Acquisitions in the Works

The investment described by Son represents more than 30 percent of the total amount all venture capital firms had available to invest as of the middle of this year. But can an investment as large as the one Son outlined generate as many jobs as he claimed?

Sprint only employs around 30,000 workers and actually has been in the process of reducing its payroll rather than expanding its workforce. Son and SoftBank Group acquired Sprint in 2013 for $22 billion.

Son had hoped to merge Sprint with fellow carrier T-Mobile U.S. to challenge frontrunners AT&T and Verizon, but was stymied in his ambitions by federal regulators. SoftBank may be hoping it has better luck getting a deal approved once Trump takes office and replaces the head of the Federal Communications Commission, the body that regulates interstate and international communications by radio, television, wire, satellite and cable.

Speaking to reporters after his meeting with Trump, Son said that he expects the new administration will eliminate many existing regulations. That should make it easier for SoftBank to push through deals that normally would not have been permitted under existing anti-monopoly rules. Son is reportedly considering telecommunications acquisitions as large as $30 billion as part of the new investment strategy.

Investing in Emerging Tech

But acquisitions, even those as large as $30 billion, typically aren't the most effective engines for job creation. In fact, most acquisition strategies are predicated on the hope of being able to increase profitability by reducing costs, specifically with regard to headcount.

Son has said the new fund will stay focused on the technology sector, with a particular emphasis on several emerging technologies such as the Internet of Things, deep learning, robotics, and artificial intelligence. The SoftBank CEO has made several large wagers on technology companies in the past.

He recently acquired British chipmaker ARM Holdings for $32 billion, and SoftBank also holds a major stake in Chinese e-commerce company Alibaba Group. And Son has made similar pledges to invest in local technology markets to the governments of South Korea and India.

Image credit: SoftBank Group.

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