Softbank’s biggest bet: Masayoshi Son plans trillion-dollar AI hub in Arizona. Details here

SoftBank Group’s founder Masayoshi Son is seeking to team up with Taiwan Semiconductor Manufacturing Co to build a trillion-dollar industrial complex in Arizona for manufacturing robots and artificial intelligence.

The billionaire aims to build a version of the vast manufacturing hub in China’s Shenzhen that would bring back high-tech manufacturing to the US, according to sources known to Bloomberg.

The park may comprise production lines for AI-powered industrial robots.

Son’s biggest bet till date, TSMC yet to respond

Codenamed ‘Project Crystal Land’, the Arizona complex represents the 67-year-old SoftBank chief’s most ambitious attempt in a career that’s spanned numerous bet-the-house bids, thousands-fold returns and billions of dollars in losses, said Bloomberg.

SoftBank officials are expecting the Taiwanese maker of Nvidia Corp’s advanced AI chips to play a prominent role in the project, although the exact plan is not clear.

TSMC already plans to invest $165 billion in the US and has started mass production at its first Arizona factory. It is also not clear whether TSMC would be interested, the news report suggests.

Softbank seeks tax breaks or funds from US government

SoftBank officials have been in touch with federal and state government officials to discuss possible tax breaks for companies building factories or otherwise investing in the industrial park.

Son has compiled a list of SoftBank Vision Fund portfolio companies that might take part in the Arizona manufacturing hub. SoftBank-backed startups working on robotics and automation technologies, such as Agile Robots SE may set up production facilities at the industrial complex, said the news agency.

The plans’ progress highly depends on support from the Trump administration and state officials. While the project may require as much as $1 trillion to execute, the actual scale depends on interest from big technology companies, the news report said.

Softbank’s bullish stance on AI

While exploring the Arizona project, Softbank also plans to invest as much as $30 billion into OpenAI. It’s also seeding money into the Stargate venture with OpenAI, Oracle and Abu Dhabi’s MGX, seeking to put hundreds of billions of dollars into data centres and related infrastructure around the world.

Those outlays come as SoftBank’s cash stood at $23 billion at the end of March. The Tokyo-based company also raised around $4.8 billion this month by selling its stake in T-Mobile US.

Son's restless search for growth

The Softbank founder’s multiple investments in projects that proceed in fits and starts make it difficult to determine how committed he is to any one venture, said the news agency

The billionaire is often goaded by the desire to boost SoftBank’s stock price and repay retail investors who’ve held onto the company’s shares from before the dot-com boom and bust. Many investors have waited for decades for the stock to recover, said sources known to Bloomberg.

If Son’s primary motivation is to clear the way for AI, it may be more cost-efficient to encourage partnerships that link manufacturing expertise with that of AI engineers and specialists in fields from medicine to robotics, and incubating smaller companies, Melissa Otto, the head of research at Visible Alpha told Bloomberg,

But pouring cash into data centres may help lower the cost of developing AI applications and spur broader adoption, she said. “He’s a long-term thinker, and he takes risks,” Otto said. “It’s just too early to tell.”