The other SoftBank

Hey, it’s Mayumi in Tokyo. SoftBank’s humble telecom unit has helped Masayoshi Son finance his grandiose bets, and at times cushioned the re [View in browser]( [Bloomberg]( Hey, it’s Mayumi in Tokyo. SoftBank’s humble telecom unit has helped Masayoshi Son finance his grandiose bets, and at times cushioned the resulting damage. It’s now at the forefront of the billionaire’s foray into generative AI. But first... Three things you need to know today: • Palantir [jumps]( on AI demand • Taylor Swift deepfakes [originated on 4chan]( • Nintendo [lifts]( its profit and Switch outlook Wading into the future It’s been almost a decade since [SoftBank Group Corp.](bbg://securities/9984%20JP%20Equity)’s main business was its mobile carrier operations with millions of subscribers and a particular affinity for Apple Inc.’s iPhone. But as the investment group moves forward into a future that meshes with its leader’s forecasts — where artificial intelligence will transform business, culture, infrastructure and the environment — SoftBank will once again lean on its telecom business. Masayoshi Son’s investments — which a conservative tally spans over 1,700 companies — scored legendary hits such as Alibaba Group Holding Ltd. and Yahoo Japan, but also include duds like WeWork Inc. or the Zume pizzeria-on-wheels venture, both made through his $100 billion Vision Fund. The one constant stalwart has been [SoftBank Corp.](bbg://securities/9434%20JP%20Equity) Operating in a country which for years was home to the world’s highest telecom fees, the wireless network churns regular cash flow that’s eased bankers’ concerns and helped Son secure loans at negligible interest rates. The parent is the telco’s biggest shareholder, and two of Son’s most loyal longtime lieutenants are in charge: Chairman Ken Miyauchi and President Junichi Miyakawa. “If Son were here, he would express this better than I could,” both Miyauchi and Miyakawa would often say when presenting on AI and technology. Their company is now amassing more AI horsepower, shifting its focus to align nicely with both Son’s ambitions and Japan’s push to create its own AI ecosystem. When the junior SoftBank reports earnings tomorrow, attention will be on how and when AI will drive revenue. Thanks in part to its parent firm’s ownership of [Nvidia Corp.](bbg://securities/NVDA%20US%20Equity)’s chip architect partner [Arm Holdings Plc](bbg://securities/ARM%20US%20Equity), the telco unit was early to [secure]( a supply of the coveted GH200 Grace Hopper chips. Nvidia calls those superchips, blending its semiconductor design with Arm technology. Access to the chips was a coup for SoftBank, which trails [NTT Docomo Inc.](bbg://securities/9437%20JP%20Equity) and [KDDI Corp.](bbg://securities/9433%20JP%20Equity) domestically. With that firepower, Son’s mobile operator is now racing to be first to [develop]( a foundational AI model for Japan. That lead is also winning the carrier public funding. SoftBank snagged ¥5.3 billion ($36 million) in subsidies to help it train its AI model this year, plus the Economy Ministry will foot nearly half the initial ¥65 billion bill for a new data center hub that SoftBank plans in Tomakomai, Hokkaido. The 70-hectare site’s capacity will eventually expand more than sixfold, fed by local renewable energy sources, the company says. Construction has also begun nearby on a planned chip foundry to be run by homegrown startup Rapidus Corp. — in which the telco unit has invested. These are examples of how Son’s investment activities and proclivities continue to shape the telco’s business. During the Vision Fund’s heyday, Son would bring startup founders from WeWork’s Adam Neumann to Didi Global Inc. President Jean Liu to the annual SoftBank World event, introducing their operations to enterprise clients. Last fall, Didi celebrated its fifth year of operating taxi services in Osaka, aided in part by SoftBank co-promotions. And for WeWork, whose Chapter-11 bankruptcy cost Son’s empire billions of dollars, the SoftBank telecom unit is taking over its operations in Japan. Around the world, startups are going under with little fanfare, while others struggle to raise cash. Son’s buccaneering investment approach contributed to the volatility they’ve all experienced. But in Japan, the mobile business that stemmed from a meeting between Son and Steve Jobs continues to hum. Years later, it remains the quiet center of the tech investment group, left with real-world businesses that remain long after the ups and downs of paper gains fade from the news. —[Mayumi Negishi](mailto:mnegishi11@bloomberg.net) The big story So far this year, there have been [over 32,000 job cuts]( in the tech industry, according to data compiled by Layoffs.fyi. Experts note reductions are mostly due to economic factors, such as the need to cut costs after over-hiring during the pandemic. One to watch [Watch the Bloomberg Technology TV interview]( with ON Semiconductor CEO Hassane El-Khoury. Get fully charged Apple Vision Pro users have to [send it back]( if they lose their passcode. Visa restrictions will be imposed by the US on people who [misuse commercial spyware](. Potential investors in Elon Musk’s new artificial intelligence startup, xAI, are focusing on [“Muskonomy” and OpenAI’s success](. Meta’s Oversight Board criticized the company’s policies on AI-generated content, calling them “incoherent,” after reviewing a [misleading Joe Biden video](. Byron Allen said he’s begun talks with Paramount on his $14.3 billion bid to [acquire the company](. More from Bloomberg Get Bloomberg Tech weeklies in your inbox: - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage - [Game On]( for reporting on the video game business - [Power On]( for Apple scoops, consumer tech news and more - [Screentime]( for a front-row seat to the collision of Hollywood and Silicon Valley - [Soundbite]( for reporting on podcasting, the music industry and audio trends - [Q&AI]( for answers to all your questions about AI Follow Us Like getting this newsletter? 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