$SoftBank Group (ADR) (SFTBY.US)$ CEO Masayoshi Son is expected to declare a $100 billion investment in the United States during a meeting with President-elect Donald Trump at Mar-a-Lago, Palm Beach, Florida on Monday.
What Happened: The Japanese tech-investing giant's founder will also commit to creating 100,000 jobs in AI and related infrastructure, according to CNBC sources. This investment is anticipated to be finalized by the end of Trump's term.
The funding may come from various Softbank-controlled sources, including the Vision Fund, capital projects, or chipmaker Arm Holdings (NASDAQ:ARM), where Softbank holds a majority stake. Some of the funds might not be newly raised, potentially including previously announced investments like Softbank's $1.5 billion in OpenAI.
This announcement echoes a similar pledge made in 2016 when Softbank agreed to invest $50 billion in the U.S. to create 50,000 jobs following Trump's first election victory.
Why It Matters: The announcement comes at a time when investor sentiment is shifting back toward the 'BoJ trade,' a strategy involving long positions in Japanese equities and banks, while shorting the yen and Japanese government bonds (JGBs). This renewed interest has gained traction, especially after Trump's election win, as noted by JPMorgan analyst Nikolaos Panigirtzoglou. The yen has weakened, moving from 150 to 153 against the dollar, and the probability of a December rate hike has dropped significantly.
Additionally, the backdrop of this investment includes national security concerns surrounding foreign investments in the U.S. Former U.S. Secretary of State Mike Pompeo recently supported Nippon Steel Corp.'s proposed $14.9 billion acquisition of United States Steel Corp., citing the need to strengthen America's position against Chinese market dominance. This deal faces opposition from both President Joe Biden and Trump, with Biden expected to block it on national security grounds.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
