tv The David Rubenstein Show Peer to Peer Conversations Bloomberg February 18, 2018 2:30pm-3:01pm EST
♪ david: when you told people you were going to raise a $100 billion fund, did they tell you you were crazy? masayoshi: some people said. [laughter] david: did you suffer discrimination growing up in japan? masayoshi: that made me stronger. david: how did you feel losing $70 billion of net worth? masayoshi: i was so close to, you know, fall down from the cliff. we almost went bankrupt. somehow, i survived. >> would you fix your tie, please? david: well, people would not recognize me if my tie was fixed, but ok. just leave it this way. all right. ♪
david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer, even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? you are clearly one of the world's most successful technology investors and one of the world's most successful businessmen. let me start by asking you about a fund that you are now raising, the vision fund. it is supposed to be a fund of $100 billion? masayoshi: yes. david: now that would be the biggest fund ever raised. so, when you told people you were going to raise a $100 billion fund, did they tell you were a little bit crazy? masayoshi: some people said. [laughter] david: you had a meeting with the man who was the deputy crown prince of saudi arabia, who is
now the crown prince of saudi arabia. as i understand the story, you went in and in one hour you convinced him to invest $45 billion. masayoshi: no, no, it is not true. david: ok. [laughter] masayoshi: 45 minutes, $45 billion. [laughter] david: ok, sorry, i apologize. masayoshi: $1 billion per minute. [laughter] david: what could you have said that was that persuasive to get $45 billion in one meeting? masayoshi: i said, you came to tokyo the first time.
i want to give you a gift. i want to give you a tokyo gift, a $1 trillion gift. and he opened up his eyes and said, ok. now, it is interesting. david: all right. masayoshi: so, i walked up to him and said, here is how i can give you a $1 trillion gift. you invest $100 billion to my fund. i give you $1 trillion. david: but what is it you told people and what was the vision you gave them? masayoshi: well, one vision, which is singularity. singularity is the concept that the computing power, computer artificial intelligence
surpassed mankind's brains. david: the singularity is the concept, that is the word means, that is the point at which a computer becomes smarter than a human brain. masayoshi: yes. today, already, computers is smarter than mankind at chess, or go, or weather forecasts. in some expert systems, the computer is already smarter. but in 30 years, most of the subjects that we are thinking, they will be smarter than us. that is my belief. david: let's go back and talk about your upbringing a bit. so, you are of korean descent. your grandfather came from korea and moved to japan many years ago. and your parents were born in japan. did you suffer discrimination growing up in japan? masayoshi: yes, i had some experience. but i feel now it was good. that made me, you know, stronger. to work harder. so, i had to prove that i am not different from any other guys. you know, not inferior. so i had to work harder to prove the value.
david: your family adopted a david: your family adopted a japanese name at one point. masayoshi: well, actually in japan, there was some period, the japanese government forced every korean to change to a japanese name. so, it was not their intention. we had to. david: you had to change? masayoshi: we have to change. that made me even more harder, because i was feeling that i was hiding something. it was even tougher. david: you did not grow up in tokyo. you grew up in a relatively small town, is that right, in japan? masayoshi: yes. in the southern part. david: the southern part of japan. it was said you are interested in meeting the head of mcdonald's. why were you interested in meeting the head of mcdonald's? did you like mcdonald's food, or what was it?
masayoshi: he wrote the book, and that book became the bestseller. i was so impressed and said, oh my god, this is great! and the guy who wrote about it must be great! [laughter] david: so, how old were you when you wanted to meet him? masayoshi: 16. [laughter] david: 16. so, you managed to get a meeting with him. masayoshi: i called his assistant, long-distance call. back then it was so expensive. i made almost 100 calls -- 60 calls. and said, this is my name, i am a student, and could you ask him to spare me some time? could you ask him? she said oh, i will try, but he is not going to meet with a student. i said well, don't decide by yourself. let him decide. [laughter] masayoshi: right? so i spoke with the different assistants so many times. and they don't give me the right answers so i said, this is a waste of my telephone bill. so, i flew into tokyo and said,
i came because the phone call becoming more expensive than air ticket. [laughter] david: so, what happened? masayoshi: so i said, tell him exactly the way i said it. you don't have to look at me. you don't have to talk to me. you can keep on working whatever you are doing. i just want to see his face. [laughter] masayoshi: for three minutes. david: ok. masayoshi: so i am not bothering him. i am just so impressed and respect him, i want to see him. and if you tell him that i am not going to bother him, his time, his money. [laughter] masayoshi: for three minutes. i am not going to damage his life, he actually asked, he said, ok. actually, he spent 15 minutes with me, talking face-to-face. david: he gave you some advice, which was to learn -- masayoshi: yeah, i asked him what business should i do? i am not going to damage his
computer. that is the one. if i were you at your age at this time, you know, this is, don't look at the past industries. look at the future industries. that is the one, the computer industry. that is the one you should focus on. if i were you, that is the one, so i said, wow, great. david: ok. so, he gave you that advice, you were number one in your class and you go to university of california at berkeley. when you were there you were not so much a student, but doing business on the side. masayoshi: well, i was a good student. but i said, five minutes i would allow, other than study. i have to make money. i want to earn $10,000 per month. and i would allow me, myself, five minutes a day. so, i asked my friends, isn't there a good job that i can earn $10,000 in five minutes a day? [laughter] masayoshi: my friend say, you are crazy. impossible. nothing like that. you want to sell drugs? [laughter] masayoshi: so i said, no, no, i don't want to do that. so i said, ok, what is the best, most efficient use of my time? it is invention. the invention. i have to file a patent.
if i get the patent, five minutes. if i focus, i can make some idea. so, i set alarm clock for five minutes. tick, tick, tick. in five minutes i said come, invention, come! [laughter] masayoshi: come! right? [laughter] masayoshi: so, i did that. david: and it worked? masayoshi: it worked. david: you invented a machine that helped people translate languages? masayoshi: yes. the first one was an electric dictionary. many students use the electric dictionary. the first one ever made was by myself. david: first electric dictionary. masayoshi: yes. david: and you sold it to sharp and made a lot of money. masayoshi: yeah, $1.7 million. david: so, what did you do with $1.7 million then? masayoshi: well, i used it to start softbank. david: did you move back? masayoshi: i did one more
project and made another $1.5 million. so, i made $3.2 million in 18 months. so, that is better than $10,000 per month. david: right. masayoshi: i told that to my friends, look, i got $3.2 million, and i kept working only five minutes a day, as i promised you. david: but then after you graduated, and you made these successful inventions, you moved back to japan. why did you move back to japan? not that it is not a great place to move back to, but you are in the silicon valley area. why not stay there? masayoshi: i created a company and my employees asked me to stay, but i said no. i promised to my mother when i decided to come study in the states. she was crying in the airport, and i said, no, don't cry, mom. after i graduate from school, i come back. i promise. she said no, you don't come back. this is forever. you know, farewell. no, i promise you, don't worry, i promise you. so, i kept my word.
david: recently, you did the biggest investment you have ever made in a company called a.r.m. masayoshi: they have 99% market share for any smartphone that you have in your pocket. i think the company is going to be more valuable than google. ♪ ♪ david: all right, so you moved back to japan, and then you start a company called softbank.
so, i aggregate all kinds of software from the small software houses. i and i wholesale to the pc stores. so, it is like a bank. software's bank. it is not the money bank. the software wholesaling, storing in my warehouse, but it is like a concept. david: so, it is very successful. softbank's stock was going up. and then you decide at some point to start investing. one of the investments you made is considered by many people to be the most successful investment in the history of mankind. you invested roughly $20 million in alibaba. at the time it went public, it was worth roughly $90 billion. so, $20 million to $90 billion is a return of 4500%. now, jack ma is a very distinguished individual now, now one of the most successful entrepreneurs in the world. what is it that made you feel this was worth putting in $20
million? masayoshi: well, he had no business plan. [laughter] masayoshi: and zero revenue. employees, maybe 35, 40 employees. but his eyes was very strong. strong eyes. shining eyes. i could tell from the way he talked, the way he looked, he has the charisma. he has a leadership. but his business model was wrong. it was the way he talked, the way he can bring the young chinese people following him. david: before yahoo! was so famous, you made an investment in it, which was very successful. so how did you hear of yahoo!? david: before yahoo! was so masayoshi: yahoo! u.s. was still private, 15 employees. and i convince them to take $100 million of our investment. so at the time we negotiated,
they grew from 15 to 35 people. 35 people. and we invest $100 million to own 35%. and actually, went ipo and made a great return. at the same time, i convinced him to start a joint venture, the directors of the board of yahoo! japan, to start another company. we put $1.2 million, they put $0.8 million. $2 million startup capital. we owned a 60%. our david: let's talk about one big mistake you made overall. obviously, you are very successful in almost everything you touch, but you were making a you lot of internet investments around the turn-of-the-century, 1999-2001. the market went down in the tech crash, and it is said that you personally lost $70 billion of net worth. the greatest loss that any human being has ever suffered financially. so, how did you feel losing $70 billion of net worth? masayoshi: one year before that, actually, my personal net worth was increasing $10 billion per week. [laughter] masayoshi: for three days, i
became richer than bill gates. david: wow. did that upset him? [laughter] masayoshi: no, before i told anybody else, our stock started crashing. david: ok. [laughter] masayoshi: so, six months after that, our share price went down 99%. so, we almost went bankrupt. and somehow, i survived. david: you rebuilt your business. and among the things you did, was you bought well-known companies. you bought vodafone's mobile telephone business in japan. masayoshi: at that time, i said, now is the time to go next stage, which is the internet telephone business in japan. will become mobile internet. so, i had to either get the license from the government, or the spectrum, or acquire vodafone japan. and first, i applied for the license to the government. and the government said no, there is no more spectrum.
i actually sued the government. and, you know, for one year, a big fight. but then vodafone japan became available. $20 billion. i have $2 billion. so, $18 billion short. david: where did you get the money? masayoshi: so, i convinced the bank, you know, that the vodafone japan, i am going to turn around and become successful and become great cash flow. they believed me and lent the money. david: and they did? masayoshi: they did. david: and it turned out to be
very successful. recently, you did the biggest investment you have ever made in a company called a.r.m., which is a semiconductor manufacturer based in london. why did you spend $31 billion buying a semiconductor manufacturer when many people think that is not the future? masayoshi: it was actually $34 billion. david: 34? masayoshi: yeah. it is not the manufacturer. it is a design house. they to sign all the chipsets. they have 99% market share for any smartphone you have in your pocket. a.r.m. has 99% market share. right? in next 20 years, they will ship one trillion chips, design for one trillion chips. so, i said, this is the company. nobody can live on the earth anymore without chips. chip is everywhere. in the car, the refrigerator, everywhere. so, if chip is something that everybody needs, and if there is one company has 90% market share, there must be a value. they are not monetizing well enough, but if i own it, we can
monetize much better. that is my belief. so, i think the company is going to be more valuable than google. available. it is a private company now. that is my belief. [laughter] david: so, you don't worry robots could become so smart they would wipe out humanity as some people worry? masayoshi: there is a danger, but when the robot's super intelligence goes beyond mankind's intelligence, they say, well, fighting is not an efficient way of living. that harmony is better. ♪
♪ david: now, in the future, you are a big believer in robots. it is your view, i guess, artificial intelligence is a good thing and ultimately will not hurt humanity, is that correct? masayoshi: right. david: you don't worry that robots could become so smart that they could wipe out humanity, as some people worry? masayoshi: yeah, there is a danger of that. there is a danger. but if you look at the mankind's history, people were killing each other with many battles among different tribes and so on.
but today's world, we don't have that kind of things in everyday life. we are more civilized. so, when the robots' super intelligence go beyond mankind's intelligence, and they say, well, fighting is not an efficient way of living. that harmony is better. it is more social. so, we are going to live in harmony. so, we are going to live in harmony. they think about us. they help us. and they tried to amuse us, and have a good love for each other. david: what gives you the greatest pleasure in the world? masayoshi: the thing is, you greatest pleasure in the world? masayoshi: the thing is, you know, i have a vision. i have a vision of singularity. that is really coming. so, we created vision fund. right? we go and change the world together, and create a better world, better world for human living.
so, that excites me. you know, thinking about what is the future? how we can change the lives of people for the better humanity? so, that people do not need to die for unnecessary reasons, like having accidents, or having the disease, or having the disaster. so, to protect humans from all those, you know, sadness is a good thing. right? so, imagining those things, and investing, and creating a group, and having great products, great solutions, is exciting. david: today, your come back and have enormous net worth by any human standard, one of the richest men in the world.
what do you do with all this money? masayoshi: well, i have not decided what to do. david: you have not decided? but you are 60 years old, you have to decide at some point. masayoshi: deciding how to spend with respect is more difficult than making money. that was a headache i had when i became so rich -- david: you were the richest man, you had that headache, lost that headache. now you have it again, right? [laughter] david: any plans of doing this for the next 20 years? masayoshi: at the age of 19 i created my 50 year life plan. and in my age of 60's, between 60 and 69, i would decide my successor, and have my successor keep on running it. so, in my next 10 years, i have to do that. but even after i find a successor and give him a baton to run as a captain of a ship, i would probably stay working with him, coaching him. and as long as i live, probably, i cannot forget about this excitement.
david: your parents are still alive. they must be extremely proud of you. masayoshi: they actually are very proud of me, and they are very happy. we are a happy family. and, you know, we don't live together, but they call me occasionally. and, you know, my dad is a funny guy. he has unique ideas, crazy ideas. and he always calls me and says, masa, i have an idea. you have to do this. he knows everything i am doing. and he is very creative, very smart. and he talk about business to me all the time. david: now, you are japanese, but you are of korean descent. but you are different from most japanese business people who are
very consensus-oriented, maybe not as entrepreneurial as you are. has that been a challenge for you in building up your business in japan? masayoshi: yeah. lots of challenge, but the uniqueness is actually good. you know? if the pack of other people go this way. i am unique. i have more opportunities. so, the difficulty, if you flip over, become the advantage. david: one final question. if you could live with your life over, is there anything you would do differently than you have done? masayoshi: i may. but this is the life i am enjoying so much. that i would love to do it again. uh, i was so lucky. i was so close to, you know, fall down from the cliff. i do not know how i could do it twice. [laughter] david: wow.
♪ nejra: coming up on "bloomberg best," the stories that shaped the week in business around the world. the white house puts out a budget and pushes for infrastructure, but there is immediate push back. >> tough to say how they get infrastructure done. >> i hate to say it, but it is irrelevant. nejra: markets work through jitters as u.s. inflation jumps. jacob zuma gives up his grip on power in south africa. ray dalio raises his short bets against european stocks. >> all the conditions are in place to start getting short, which is a countercyclical view. nejra: market swings have some investors frowning, but two of the biggest names in banking explain why volatility is making them smile. >> we actually don't believe that what we have seen is a major disruption. >> it is a much better