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wanted to build the world’s first cloud-based robot. “All of
a sudden we could help guide a blind person with sensors,”
he proclaimed. “We can replace guide dogs!”
Before the final talks, Son took to the stage again and
reminisced: “When I was 17 years old, the very first time
I saw a photo of a microprocessor made me cry. I was
overwhelmed.” He then introduced Simon Segars, the CEO
of British chip-design firm Arm Holdings. “Our first processors
were the size of a shirt button,” Segars began. “Now we can
deliver thousands of times more processing power with a chip
the size of a pinhead.” Arm microprocessors were being used
in robotic surgery, autonomous vehicles and smart cameras,
but the AI future would be unrealistic – too power-hungry and
beset by time lags – if all that data had to be sent to the cloud
for processing and then back. “If every person with an Android
does three minutes of voice recognition a day, Google would
have to double their data centres,” Segars said. The next gener-
ation of microprocessors would have to incorporate AI and
process data on the sensor itself. “We can’t do it on our own,”
he told the audience. “We have to work together in partnership
with other companies to deploy these technologies.”
At the end of the talk, Son shook Segars’ hand. He said that
Arm is indispensable not just to SoftBank, but to the whole
of humankind. “And now they are a member of our family,”
Son continued, turning to the crowd.“If we can join forces,
we can be the gentry of this new generation, making the future
a better place to live.” He then bowed and left the stage.Son has obsessively been trying to make SoftBank the
world’s biggest company since the day he founded it in 1981,
as a PC software distributor (SoftBank stands for Bank of
Software) – the day when he, a 24-year old entrepreneur, stood
on a crate in front of his two employees and excitedly promised
that one day they would be the greatest in the world. Those
employees quit a few days later, but Son, now 61, relentlessly
pursued his ambition, his “300-year vision”: a technology
revolution that will ultimately culminate in the singularity,
a point in history where AI supersedes human intelligence
and redefines every single industry in the global economy.
In that version of the future, SoftBank won’t be the next
Google, the next Apple, or the next Microsoft – Son doesn’t
believe that one brand or one business model could ever be
capable of delivering the singularity. What will do so is what
Son calls the “cluster of number ones” strategy: a SoftBank-led
ecosystem of AI companies, spanning all industries from
healthcare to transportation, from ride-hailing to robotics, a
diversity that underpins the Vision Fund’s investment portfolio.
“We want to form a coalition of like-minded comrade entre-
preneurs,” Son told the audience at the 2017 conference.
“A revolution can never be realised with the power of one.” And
at the centre of that ecosystem is the company that designs
the small, low-power processors present in 95 per cent of all
smartphones, not to mention most smart speakers, health
trackers, drones and TVs: Arm Holdings.
Son became familiar with Segars in 2006, when he first
met the then CEO of Arm, Warren East, and Segars was one of
the firm’s first employees. At the time, Arm already enjoyed a
dominant stake in the nascent mobile market. This fact alone
impressed Son. He knew that mobiles would soon outperform
PCs, and as a result the internet’s centre of gravity would move
from desktops to the smartphone. Son envisaged that the
low-power, high-processing architecture of the Arm micro-
chips would be the centre of the future digital economy.
That insight was behind SoftBank’s acquisition of Vodafone
Japan, a struggling mobile carrier beset by connectivity
issues and unfashionable handsets, a few weeks prior to his
meeting with the Arm executives. SoftBank’s board had beensceptical about the acquisition, but Son was adamant. Besides,
he had a strategic advantage. Prior to the acquisition, Son
had travelled to California to meet Steve Jobs. He brought
with him a hand-drawn sketch of a smartphone and showed
it to the Apple CEO. (“It looked like a toad with the battery
stuck out,” Son said in a 2016 interview with The Nikkei.) Jobs
hated the ugly sketch but he told Son that his intuition was
right. Jobs had been developing the first prototypes of the
iPhone. Son left from the meeting with a commitment that,
in case the Vodafone acquisition went ahead, he would be
granted an exclusive deal to distribute the iPhone in Japan.
Segars and Son kept in contact, meeting a couple more
times in 2006, then again in 2014 and 2015. By the time Segars
replaced East as chief executive in 2013, Arm – just as Son
predicted – had consolidated its marketshare in the chip
industry, licensing its product to Apple, Samsung, Nvidia and
Qualcomm. And as Son determined, Vodafone Japan (now
SoftBank Mobile) had become one of Japan’s leading mobile
companies – thanks to its exclusivity deal with Apple’s iPhone.
In June 2016, Segars met Son for dinner at the latter’s
mansion in California. Segars would later describe it as the
most important job interview of his life. He just didn’t know
it at the time. During that meeting, Segars shared with Son
the dilemma that he was facing at Arm – but noted that it also
presented multiple huge opportunities. With the smartphone
market saturated and growth margins reduced, Arm would
have to significantly lower profit margins in order to make
long-term investments in areas such as AI, sensors, 5G and
autonomous vehicles. “We had to have tough conversations
with our stakeholders,” Segars says. “I remember being asked
why all our margins were going down, and explaining that
we’re investing in the long-term opportunities. I still vividly
remember the look of shock on one guy’s face.”
A few days after their meeting, Son called Segars: “I need
to speak to your chairman as soon as I can.” “I’m sorry, It’s
not going to happen,” Segars replied. Arm’s chairman, Stuart
Chambers, was holidaying on a yacht in the Mediterranean.
But Son insisted: “No, no, no. You’ve got to make this happen.
I am going to fly you out. Get into the nearest port, I will fly
you there and I will fly out – and we will have this meeting.”
They met at The Pineapple, a seafood restaurant on the
marina in Marmaris, on the Turkish riviera. Son had booked
out every table – when Segars and Chambers arrived,
there was no one inside apart from the waiters. When Son
arrived, he sat down and told the British executives that he
wanted to buy Arm, and made them a series of promises:The India-based digital
wallet startup exceeds
450 million transactions
a month for more than
30 million customers.
“Most UK challenger
banks have single-digit
million customers,” says
SoftBank partner Munish
Varma. Paytm has recently
partnered with Yahoo!
Japan to overhaul the
latter’s payment system,
and launched a new
service called PayPay.A German online car dealer
founded by Hakan Koç and
Christian Bertermann,
it has more than 50,000
partner dealers across 30
countries, selling more
than 40,000 cars every
month. “Few people can
actually move cars very
efficiently from, let’s say,
France to Romania,” says
SoftBank partner Akshay
Naheta. “They’ve got the
logistics figured out and
now have a massive brand.”