Welcome to tech Stuff. This is the story. Each week on Wednesdays, we bring you an in depth interview with someone who has a front row seat to the most
fascinating things happening in tech today. We're joined by Lionel Barber, journalist, former editor in chief of The Financial Times, and the author of the book Gambling Man, The wild ride of Japan's Masayashi song Cara, I'm curious if you remember all the way back in January when President Trump announced Stargate, the multi hundred billion dollar initiative to build AI infrastructure here in the US.
Oh, yes, I do. I think it was the second day of Trump's presidency.
It absolutely was. And during the announcement, the President was flanked by three people. Do you remember who they were?
I believe it was Sam Altman, the CEO of Open Ai, Larry Ellison, the co founder of the software giant Oracle, and then the man of the hour, Masiyoshi's son.
That's right, also known by the nickname Massa or Massason. He's the one we're talking about today because, unlike Altman and Ellison, he's not really a household name in the US, and also because Lionel barbera wrote an absolutely fascinating book about him.
It's true, I actually had no idea who he was, but Masa was definitely infectious that day he spoke after Larry Elson, and you couldn't help but love his self deprecating joke when a staffer set up a stool for him behind the podium.
That's good, that's great, I hear it all.
My guest on the story this week, Massa's biographer, Lionel Barber, remembers this moment well, and specifically the huge pledge that Massa made to the US.
Masa is promising not one hundred billion dollars of investment or two hundred billion dollars of investment, five hundred billion dollars of investment in AI data centers around the States. This is the beginning of gore there is of America. This is one great example I think.
Okay, but I didn't think Massa was American.
It's true. He's Japanese of Korean descent. But I want to highlight this moment because I think it's a good example of his long held strategy figure out who or what is driving technology's latest trends, and then invest big, really big. As the title of Lionel Barber's book suggests Massa really is a gambling man. He's made bets on businesses with an almost reckless abandon including companies like Ali Barba,
we work in Nvidia and byte Dance. Sometimes his investments are huge wins, but other times they fall flat.
I'm actually really excited about this conversation because the evolution of Massa's investments in many ways mimics the evolution of technology from the nineteen eighties to today.
That's right, I mean wherever innovation goes, So tutors Maslyashison and his checkbook. Most recently, actually, after we take this interview with Lionel Barber, Massa's company, SoftBank, pledged forty billion dollars to open AI's latest fundraising round. I keeped off my conversation with Lionel by asking him to start at the beginning, just taking a couple of steps back, and who is he and what is his company? Soft Bank.
He is a Japanese Korean. It's very important that we just dwell on this for a couple of minutes, because that means that he's an outsider. He's not pure Japanese. His grandfather and grandmother came as economic migrants from Korea at a time when Korea was a colony of Japan, so they had a Japanese alias. They were living under cover, and then obviously had the Second World War where Koreans were treated very badly. They were forced labor, they were
discriminated against. They lived in a ghetto in a shantytown, and Massa was born on the edge of that shantytown in nineteen fifty seven. So he grew up his first few years in poverty, and his father was a bootlegger, a loan shark, and then went into pachinko gambling. This underground, underworld figure made money. So Massa then said, I'm not going to go into pachinko gambling. I'm going to learn English. I'm going to be a tech entrepreneur myself, and the
route to that is to come to America. So he then gets into high school, fast tracked into college, and then he does three years at Berkeley where he founds his first business, and he then goes back to Japan after six years to found SoftBank, which essentially is a software distribution business.
You were the editor of the Financial Times, i think for fifteen years from two thousand and five to twenty twenty, during which time I can imagine you came across a lot of interesting people and potential subjects for a book, but you chose this subject.
Why I went for a businessman who intrigued me because I've met him a couple of times and there was no Western biography of him, and he was somebody who intrigued me because of his giant risk appetite. And lastly, I thought he was a creature or a businessman who represented an age, the aged globalization, open board borderers, finance, where tech this huge influence of tech from the microchip to the internet, now artificial intelligence, and he's been associated
with that for four decades. So I thought it's a good subject.
What is it that you can't understand about the world of technology and how it's developed without understanding Massa?
In history, Massa has been right about the grand arc of history when it comes to how technology is developed. I mean, he was early ish on the microchip. He claims to have had this epiphany where he saw a computer magazine in the mid nineteen seventies and said, oh, this is wonderful, this is amazing. By the way, that's very similar to Bill Gates's own story, so you have
to wonder whether he possibly appropriated it. But I wouldn't want to cast dispersions, But I'm just saying that Bill Gates tells exactly the same story about opening the computer magazine and seeing the Intel processor. But the serious point is he understood that software was going to be a very potent force. So he decided to go into software distribution at a time when that wasn't a business in Japan.
And not only that, when Japan was the world leading economy because of his hardware.
Correct, they were great at hardware, but not so much software. Anyway, Massa got that right. Then he pivots to the Internet. He invests in Yahoo, he invests in Ali Baba, the great e commerce giant in China. He makes huge fortunes as a result of that. But then he pivots to mobile and mobile internet and sets up his own mobile phone business, taking on well one of the most bad companies in the world, NTT DoCoMo, the formerly state telecoms champion.
And then he pivots and he talks into AI. Now on AI, he has been heralding the moment in the future where you will see singularity, where robots intelligence essentially equates or surpasses human intelligence and what that would mean. So I think he's been something of a visionary Internet profit and technology profit as well as an investor.
I want to understand a bit more about Massa's relationship with the US. I mean, you said that he transferred to high school in the US, which I can't imagine how hard that must have been from Japan in a pre internet age. I mean, how on earth did he blood off?
Can you imagine you've basically been in Japanese high school, you don't really speak any English, and then you go and he did a summer course for six weeks. And I think the one thing I'd say about Masa is he really does work hard. He's an incredibly focused individual. So he worked, worked, worked on his English and it got better. And then he got a break because at high school he wanted to apply for university early, and the teacher basically gave him extra time to take the exams,
so he had a dictionary in front of him. They went to the local exam board, and you know, because he was quite bright, so he did very well in things like maths, But can you imagine taking an English exam. Anyway, he finished sort of somewhere near midnight, and he got through, and he got to a place called Holy Names, and then he transferred to UC Berkeley, where he majored in economics. It shows an immense determination and resourcefulness.
You mentioned he was Korean Japanese, grew up facing enormous prejudice, decided not to use the Japanese name that his family had adopted it, rather to use his Korean name, even though he didn't speak Korean. A huge believer in the future of technology and technological development, why did he leave UC Berkeley to go back to Japan rather than just trying to make his fortune in the US.
Well, he gave a promise to his mother and to his parents, his father that he would come back. He also had to promise that he wouldn't marry I'm sorry listeners, that he wouldn't marry an American girl, that he had to come back and get married in Japan. And he also promised, he didn't keep that he would do all studies and no business, because actually he did some studies and he did business.
And did he found soft Bank. As soon as he got back to Japan.
He spent almost a year trying to figure out what to do. And its important story how he made his first fortune at Berkeley by developing an electronic speech translator, where he worked with a man I discovered, Professor Forrest Moser, who was the original inventor of this speech translator. Anyway, they turned it into a commercial product and sold it
to Sharp. He did make money from that, but he wasn't sure what to do when he went back to Japan, and he thought about Pachinko, then he said no, And then he came on this idea of software distribution, which was a completely new business.
What does that mean? Does that mean to sending CDs around? And what does software distribution mean?
Well, in those days they didn't have CDs. I mean we're talking in sort of nineteen eighty one two, so little boxes. And essentially this man Mase, I mean, he is the most amazing networker you've ever seen. He met everybody, He met the boss of Samsung when he was only twenty five years old. Twenty four years old, he's meeting these people are incredible. Bill Gates remembers him. And essentially Gates was trying to sell software in Japan. He didn't
choose Maso as his partner. But you had to have a relationship with the developer, but then crucially a relationship with the retailer. And he was the middleman. But you really had to crack the retailing system. And what he did by that is he went to an exhibition, didn't sell very much stuff, but kind of said softback is
going to take over the world. And he got a big break by one of the major retailers sent their boss around to see him, and you know, there's this guy, he's only twenty four years old, and he does the deal, and so he cracks the retail system but also acts as a bridge between America and Japan. It's clever.
After the break, Massa becomes the richest man in the world. Briefly, stay with us, welcome back. Recently, I spoke with Lionel Barber, author of Gambling Man, the Wild Ride of Japan's Masi Ashi Son about the legendary tech investor, and I wanted to know how Massa became the world's richest man back in the early two thousands. So there's a moment, a very brief period where he is the richest man in the world. What is that moment? And what is the basis of his fortune.
Well, in Japan, he did very well on the software distribution side. But then there's the bubble, real estate bubble crashes, the banking systems underwater, there's low interest rates, strong yen, and so what he does is he pivots back to the United States and starts buying some assets. So he gets into telemarketing. He buys amazingly this computer magazine publishing business, Ziff Davis. He gets into buying Condex.
The trade fair Condext is like a predecessor to the Consumer Electronics Show.
Absolutely, it was the computer trade fair when PCs ruled the world. This was the trade fair you had to go to. It was owned by the formidable Trump supporter, Sheldon Adelson, I should say Sheldon Adulson sold the trade fair Condex to Mussa for eight hundred and fifty million dollars. Basically, the business is peaking, but Massa thinks he's hit pay dirt because he's now the impresario where he can meet everybody, right, and he's got a I think.
He described it as a map and a compass to the USA.
There you go, that's what it was. But he's the he's mister big he's running the trade show. Very shortly afterwards, he hears about this company called Yahoo, which many people might not think is so great now and it's all been superseded by Google, but believe me, in nineteen ninety six, ninety seven, ninety eight, ninety nine, Yahoo was the deal. Massa got in early and by investing he got forty percent.
And I tell the story about how he outmuscled the legendary Sequoia investor, my Moritz and Sequoia, you know, Cirrus VC firm.
He was just able to be more aggressive than Soil.
He was more aggressive and he essentially Jerry Yang, the co founder of Yahoo, gave me two and a half hours of his time to talk about this and about his relationship with Massa going back to ninety five ninety six, and he says Massas that you need one hundred million, I'll give you a hundred million, and Jerry An says, well, we don't need one hundred million, and Massa says, everybody
needs one hundred million re tarlets. Everybody needs a hundred million, And he then says, if you don't take it, I'll give it to the competition. And by the way, he does that all the time. He really does threaten people. If you don't take my money, I'm going to give it to the competitor. So he banks that investment. Forty percent of Yahoo Yahoo stock is going through the roof, and then he's able to sell a little bit of stock and make a load of money. And people look
at that and say, well, he's got the money. So he invests in about four hundred companies and then obviously.
Literally the richest man in the world for three.
Days February fifteenth, note that date. So this was a lot about Yahoo, but also the dot com bubble, so mass is seen as the center there, and for three days he is the richest man in the world, Richer than Warren Buffett, richer than Rupert Murdoch, you name it. And then it all goes pop.
But the amazing thing is, I think the timeline is that he makes his Ali Barbar investment very shortly before the dot com crash, right, So in a sense, just as his fortunes are beginning to wane as the richest man in the world, he's made what some regard as one of the greatest technology investments of all time.
Now, it's really interesting that you've honed in on this question of timing. You're dead right invests in. He's in a speed dating session in Beijing, and again I described this story where he's he's just meeting all these Chinese tech companies and he sees Jack ma and he smells the horse flesh. He thinks this is really the guy, and after barely fifteen minutes, he says, I want to invest. I've spoken to two other people in that meeting in
Beijing in ninety nine. They all said, no, Masa, that's not the right thing, and he insisted and he got it right now. I also spoke about for the book to Joe Sai, who's now chairman Ali Baba, who is the co founder with Jack maher and Joe Sai said, you know, we were really lucky to get that investment because with the dot com crash, Ali Baba could have been really hurt. So I think it's really interesting that Masa made that deal at that time, that it helped him, but it also helped Ali Baba.
There's an excerpt of your book in wid magazine, and I think you mentioned one of your favorite stories from the book is one which has to do with Massa Steve Jobs and an early hint about the future of the iPhone.
The consequential meeting that you're referring to, where Massa, and this is by Massa's account, comes up with an idea for what we all now now is the iPhone, which essentially is not just a music player but can do other things, and.
It's Massa comes up with the same.
Yes, he has the idea, but Steve Jobs says, well, very interesting, Massa. Because Massa then draws a drawing I love writing this because it's so funny, and Massa insists he wrote this drawing, and Steve Shall says, I don't need your shitty drawing. I'm working on something myself like that, and ma says, oh, oh, well tell me about it.
He goes no, no, anyway. Massa then claims that he says, well, I want exclusive distribution of this new thing, and he claims Steve Jobs agreed because he liked Masa and of course this was hugely consequential. It was massively important. Massa's just trying to set up a mobile phone business and he gets this wonder product. The only problem with the story and I wouldn't wish to challenge it too much, but I mean it is nearly three years ahead of launch.
Massa also says, by the way, that in that period he came up with ideas like emoticons and other features of the iPhone. I think it's fair to say, because Masa is fascinated by technology, that he did have some new ideas about going beyond the iPod to think about the iPhone. I think I give him some credit for that. But did he invent or did he kind of coinvent the iPhone? Well, we'll have to ask Steve Jobs, won't we.
He did secure distribution of the iPhone in Japan, which was a major boost for his business.
Well, it was absolutely critical because Massa had bought Vodaphone Japan. Now that was the also ran mobile phone business in Japan. The only thing going for it was that it had David Beckham in its marketing campaign. Otherwise it was pretty undistinguished. And Massad had a huge amount of money nearly twenty billion dollars, huge leveraged bid. So he needed given he was going to create his own brand, SoftBank Mobile, he needed a great product and you know what, the iPhone
was the wonder product. So all credit to him forgetting it. And beating out Japanese competition.
Coming up, Massa continues to make big bets on the tech industry. What went so right and what went so wrong? After the break Welcome back, We're diving into the amazing story of Masashi's son, both the highs and the lows, from his successful Yahoo and Ali Barba deals to the acquisition of Condex, a trade fair with a bloated price tag, but which likely led to some of the most important connections in the tech industry. What Master is most well
known for maybe SoftBank's Vision Fund. Founded in twenty seventeen. The one hundred billion dollar venture capital fund has had a major impact on tech, and I wanted to hear from Massa's biographer, Lionel Barber, about how the Vision Fund came to be.
Mass has always wanted to be an investor. He can be an operator, but it's a little bit boring compared to the thrill of investing. So round about twoenty twelve thirteen, he pivots away from becoming the world's greatest telecom operator because by the way, he was sizing up that bid for Sprint, which was successful, linking that to SoftBank Mobile. He says, I want to be a global investor, I need a front guy. So he hires Nick esch Aura from Google to be his number two and potential successor.
That doesn't end well, but around this time he says, what we need is to create something of scale in venture investing, and I want to do something that is bigger than anything. So remember VC funds in the mid teens that probably five billion was the ceiling for what
people thought was feasible. But Massa then says, well, I think we should be bigger than that, and I think the money he gets introduced some introductions is in the Gulf, in the Sovereign Wealth Fund Saudi Arabia United Arab Emirates. This is where some money is, so why don't we go there? And I describe how he's on this trip with his bankers and he suddenly turns twenty billion dollars
into one hundred billion dollars for the fund. They can't believe it, but essentially that the important point is there's a convergence of interest between Massa, who wants a lot of money to invest and get in with the latest technology companies, and the Crown Prince of Saudi Arabia, who wants to get into the tech eco system and you know, diversify his countries, the Desert Kingdom's economy away from oil. So he's prepared to put up money, huge amounts of
money to do that. And that's what happens. And you know, it's a roller coaster ride. Some bets are not bad. It's not so distinguished, but not a disaster. But it certainly blew away the competition and high as everybody would knows. I mean, the impact on valuations was tremendous and it set off an arms race in venture fund investing.
What was the vision that he laid out for the Vision Fund to NBS and his investors other investors in the.
Gulf, I am the man to introduce you to the most cutting edge technology companies in the world. I am the man who understands the application of technology which will help modernize your country. I will be part of.
That talk about some of the investments, because I think open Ai, Nvidia might Dance were in there, but so were we work even when the whole world thought that this was a losing bet, and as I kept doubling down.
Yes, because he said to colleagues, and I report this in the book that everybody said I was wrong about Ali Barber, and I was stuck with Ali Barber, and I turned one hundred million dollars into one hundred and thirty billion dollars billion by the way, with a B. So the more you tell me that I'm wrong about Adam Newman and we work, the more I say, now I'm sticking with him. It's one of his faults. His
weaknesses is that he falls for founders. If he thinks one is the greatest, he kind of encourages them to think even bigger. And I was talking to one of the soft Bank executives asking them, well, describe this relationship, and he said to me, it's very simple. It was like feeding a monkey alcohol. That was Massa's relationship with Adam Newman.
How do you explain how he got it so right in some cases and so wrong in others.
Well, you've mentioned some very important investments like byte Dance and also in VideA. We got to mention Arm, the UK based designer of advanced semiconductor chips, very important company, bought that cash thirty two billion in two thousand and sixteen and then put part of that in the Vision Fund. He did invest in in Nvidia and he held it for a while, but then Odea. He had five percent of in VideA, but he sold. This could have been the Ali Barber investment, but he didn't stay with it.
And he makes a joke about it now, But that was a big miss now overall in the Vision Fund, I think what happened. There's an adage in Wall Street that you can make a load of money on a small amount of money, but trying to make a load of money on a load of money is much harder to get the returns. And also discipline completely broke down. I mean, it's mad. People are being rated according to how much money they were putting through the door. Massa
was seeing people and you know, handing out money. That this hilarious story of Herman Marula of imagined. He goes to Tokyo and he's hoping, he's hoping, above hope that he can get fifty million dollars from Massa and Massa says, no, you take five hundred million dollars. Herman Marula doesn't know what to do with the money. So it's mad. And I've talked to people around Martha and people who are involved in the process, and they do say, you know
there were too many ship burgers. Excuse my language again.
I mean, I guess the other metaphor you use is force feeding.
So yes, force feeding, thinking that you can get growth by turbo charging the tech companies with just money, and obviously that doesn't work. It depends on the found It depends is there a serious business plan. You know, companies don't need that money per se that amount of money. And also, by the way, it's not venture fund capital really, I know he describes it as such, but if it's venture fund, you don't do what you do with we
work well, you keep putting money in. When it's hugely loss making and blown up up, you let it go and move on to the next thing. So I think all the discipline broke down and it ended in huge amount of tears when COVID came. I suppose one last PostScript, which is very relevant to today, is that Massa claimed
to be investing in AI companies. But these were like dot com companies from twenty years before that had the dot com moniker, but they weren't the real deal, and they certainly weren't deep AI like Nvidia.
How much do you know about how that sort of Stargate moment came together, and can you help us understand between Massa, Larry Ellison, Sam and Donald Trump, what is each person's role in Stargate.
I've been trying to put this together, Arson. I don't claim to have the full story, but here are some important parts. The first is Massa's on his back flat out after he loses a load of money during COVID. He then comes back briefly because everybody's enthusiastic about tech. Then there's another correction post to the Ukraine War, and he goes essentially serving penance in private in Tokyo. He's
grounded because he can't travel because of COVID. But what he's doing is plotting his comeback, and he's thinking, what assets do I have which would allow me to play a big role in the next phase of the technological revolution? And yes it is AI and he says, well, one thing I have is ARM, the designer of these super chips. And he says, well, we're going to monetize that more. But what can I do to leverage Arm? He tried to do a merger within video, but the regulators turn
him down. Now what he then says is, oh my God, I've just tried chat GPT. This really is an amazing product. I've got to meet Sam Altman. I've met him before, but I need to persuade him to take my money. Well, I understand that, actually that didn't come across straight away. They did not. They weren't big buddies, and Sam sort of gid I didn't need your money. I don't need this. I don't need five billion, ten billion or even more
that you're offering. At that time. Sam Altman is buddy buddies with Microsoft because they're supplying a lot of the computing power. But Microsoft, they say, well, we don't want to be overly reliant on Sam Altman for the next phase of artificial intelligence, in the race to artificial general intelligence, we need our own capacity. So there's a bit of a sort of shifting balance of power there. So that means Sam Altman, he's saying, I need more computing power
at this point. Larry Ellison, because he's a neighbor of Trump's in Florida, does have a data center plant he wants to build. It's in Abilene, Texas, and he's looking at that. He's got lots of money, but he's also got computing power, and he also wants to get into the AI super AI race, so there's a connection.
What does this moment mean to him in that case where his view of what's to come seems to be playing out.
Well, he's a very happy person. And that's why he's wearing that big smile next to Donald Trump, because he was on his back in the early part of this decade because he lost so much money on the Vision Fund. So he feels vindicated. He feels I'd be in the right side of history. I was right in essence about how the Internet was going to have a profound, a huge revolutionary impact on the economy and society. And now it's going to be AI, and I am a profit vindicated.
I guess he's the gambling man, not you. But I mean, if you had to make a bet on how Stargate will play out for him, it will this be another triumph for another wash.
I think it'd be better than a wash. I'm not quite prepared to say that it would be a triumph in terms of massive returns for him and his investors. I wouldn't be as confident as that. I've already talked to a couple of investors who say, well, we'll come in at the beginning on Stargate and then we'll sell down some of our holdings to realize the money because the valuations were not sure about. I think he wants
to write his part in history. He wants to be part of this next jump to artificial in gel and intelligence, and that's what I report in my book. In my last interview, he talked about that legacy just to close.
I mean, the other thing people think about when they think about legacy is succession, which hasn't always been an easy thing for Massa to plan. Do you have any sense of succession plans?
The answer to that is nope. He did talk about stepping down when he was sixty, but now he says he's fulfilled and he's going to make history. And I think the succession involves him being carried out in a box and then who knows what happens to SoftBank then will it be broken up? When asked about succession, he says, well, I don't have any sons, so somebody was too polite not to point out that, you know, well, you do have two daughters, but they're very much in the background
and they're not involved. Directly in the business. So it's there are one or two talented Japanese executives who could take over the gotto son the finance directors of a very strong executive, but nobody is like Masa and soft Bank would not be soft Bank without Masoci song.
Lionel, thank you. I really enjoyed that conversation, and Gratefulty for shedding so much light on this fascinating character.
Thank you, os It's a great pleasure. And thank you for reading the book and asking such good questions. Thank you.
That's it for this week for tech Stuff. I'm Asva Loosha. This episode was produced by Eliza Dennis and Victoria Dominguez. It was executive produced by Me, Karen Price and Kate Osborne for Kaleidoscope and Katria Novel for iHeart Podcasts. Jack Insley mixed this episode and Kyle Murdock theme song. Join us on Friday for the weekend tech Karen and I will run through all the most important tech headlines, including
some you may have missed. Please rate, review, and reach out to us at tech Stuff podcast at gmail dot com. We love hearing from you.