Japan billionaire wants to create a $1 trillion AI hub in the U.S. Is it realistic?

SoftBank Group founder Masaesi Son is considering building a $1 trillion industrial complex in Arizona to produce robots and assemble AI chips, sources told Bloomberg. However, it is not yet clear which companies will support the idea and where the Japanese conglomerate intends to find funding: it is already involved in the $500 billion Stargate megaproject, in which it is working with partners to raise investment to build AI data centers in the United States.

Masaesi Son, founder of Japanese conglomerate SoftBank, is going to develop high-tech manufacturing in the United States by launching the Crystal Land technology park in Arizona worth up to $1 trillion, Bloomberg reported. The entrepreneur was inspired by the model of Chinese Shenzhen, which in 20 years has grown from a fishing village into one of the world's largest high-tech centers. Crystal Land is expected to include production lines for building AI-enabled robots as well as semiconductor companies. SoftBank and the US Department of Commerce did not respond to the agency's request.

The actual scale of the technopark will depend on the interest of major technology players. SoftBank counts on the active participation in the cluster of TSMC, a manufacturer of contract AI chips for Nvidia. However, it is still unclear exactly what role the company should play. TSMC is already building its first plant in Arizona and is going to invest $165 billion in this project. Bloomberg's source explains that SoftBank's plan will not affect TSMC's strategy.

Son is in personal consultations with major technology companies, including the management of South Korea's Samsung Electronics, the agency wrote.

His sources also say that the SoftBank CEO has already compiled a list of startups from the portfolio companies of his Vision Fund venture fund that could participate in the Crystal Land project. Among them is SoftBank-backed Agile Robots, which develops automation technologies. It may open a manufacturing facility in Arizona, the agency suggests.

According to Bloomberg's sources, SoftBank representatives discussed with federal and regional authorities possible tax incentives for companies that will invest in the AI hub. In particular, they were talking about talks with U.S. Secretary of Commerce Howard Lutnick. 

According to Melissa Otto, head of research at Visible Alpha, if Masaesi Son's main goal is to accelerate AI development, it would be more cost-effective to promote collaboration between manufacturing companies and AI specialists, as well as support smaller, innovative players at an early stage. At the same time, the investment in data centers that SoftBank plans SoftBank, could lower the cost of developing AI applications and help spread them, the analyst acknowledged. "It is thinking strategically and is willing to take risks. But it's too early to draw conclusions," Otto said.

The construction of the Crystal Land technology park involves project financing and may become the largest investment project of the 67-year-old founder of SoftBank in his career, which has already seen both multiple profits and billion-dollar losses, Bloomberg notes. The agency does not specify whether the project involves financing from SoftBank itself.

The conglomerate has previously announced plans to invest up to $30 billion in ChatGPT chatbot developer OpenAI, as well as to acquire for $6.5 billion American semiconductor company Ampere Computing, which develops server processors on ARM architecture designed for data centers and cloud computing.

SoftBank is also involved in Stargate's large-scale initiative to build AI data centers in the US. Together with OpenAI, Oracle and the MGX fund from Abu Dhabi, it planned to raise about $500 billion from outside investors. Donald Trump unveiled the project back in the winter, but it never acquired clear contours as investors delayed funding decisions due to duty pressure, Bloomberg explains.

"Masaesi Son's initiative to create a $1 trillion industrial complex in Arizona may signal a willingness to make major new investments, despite already announced deals worth more than $40 billion with OpenAI, Stargate and Ampere Computing," explains Bloomberg Intelligence analyst Sharon Chen. He emphasizes that SoftBank may have to invest in startups to build the technology park facilities. And to channel funds into riskier and unlisted companies, "the conglomerate may need to monetize mature assets."

SoftBank had about $23 billion in cash at the end of March. In June, the company raised another $4.8 billion by selling about a quarter of its stake in U.S. mobile operator T-Mobile. In addition, it still has net assets worth about $161.6 billion, the largest share of which is held by the developer of architecture for processors Arm Holdings - this will allow the group to borrow if necessary, according to Bloomberg.