“Masa (SoftBank) of Japan has agreed to invest $50 billion in the U.S. toward businesses and 50,000 new jobs. … Masa said he would never do this had we (Trump) not won the election!”

–Trump, posts on Twitter, Dec. 6, 2016

After a meeting with Masayoshi Son (“Masa”), the chief executive of SoftBank, President-elect Donald Trump celebrated the company’s announcement of its plan to invest $50 billion in the United States and create 50,000 jobs over four years. Trump then claimed that Son had promised to invest the money in the United States only because Trump was elected.

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This claim is dubious, given the reality of investments in the worldwide technology industry. We took a deeper look at the facts.

The Facts

Let’s rewind to October 2016. About three weeks before the U.S. election on Nov. 8, SoftBank announced its plans for a technology investment fund of up to $100 billion, named the SoftBank Vision Fund. SoftBank signed an agreement to make Saudi Arabia’s sovereign-wealth fund the lead partner. Over five years, SoftBank plans to contribute at least $25 billion to the fund, with Saudi Arabia’s fund investing up to $45 billion and an additional $30 billion from other investors.

“With the establishment of the SoftBank Vision Fund, we will be able to step up investments in technology companies globally,” Son was quoted in the Wall Street Journal. “Over the next decade, the SoftBank Vision Fund will be the biggest investor in the technology sector.”

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After Trump and Son met on Dec. 6, they spoke to reporters in the lobby of Trump Tower. Trump said of Son: “He’s just agreed to invest $50 billion in the United States and 50,000 jobs. And he’s one of the great men of industry, so I just want to thank you.” Son repeated his commitment and said he would create 50,000 jobs by investing in start-up companies in the United States. Son told reporters that he came to celebrate Trump’s election and that Trump “would do a lot of deregulation.”

Son told the Journal that the $50 billion will come from the $100 billion SoftBank Investment Fund. It’s not yet clear how much of the $50 billion headed to the United States would come from SoftBank, the Saudi fund or other investors. SoftBank declined to comment further on whether, or how much, the company planned to invest in the U.S. before Trump’s election. A Trump spokesman offered this comment: “President-elect Trump’s tweet speaks for itself.”

After acquiring Sprint, Son had planned to merge the carrier with German-owned T-Mobile. But he abandoned the plan amid signs that U.S. regulators would reject the deal, the Journal reported. From the Journal:

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“Some investors and analysts have said he could make another attempt after Mr. Trump’s election and when a new chairman is appointed to the Federal Communications Commission. Mr. Son planned to tell Mr. Trump about what happened with T-Mobile, and how he had wanted to invest in the U.S. but the regulatory climate was too harsh so he invested outside the U.S. instead, the person familiar with the matter said.”

Analysts in Japan and the United States suggested that Son may have had plans to invest in the United States anyway regardless of the election but decided that Trump’s election was the time to announce it, sensing U.S. regulations may change to his favor under the Trump administration. The Mainichi, a major Japanese daily newspaper, wrote that some analysts in Japan believe Son has high expectations for regulatory policies to change under Trump.

But much of the SoftBank Global Fund money might already have been destined for the United States anyway, according to analysts interviewed by The Washington Post.

In 2015, venture capitalist investment in the United States hit its highest point since 1992, according to an analysis by EY. The United States accounted for $72.3 billion in investments through 3,916 deals, comprising about half of the $148 billion in global venture capitalist investments in 2015. Some of the most promising tech companies are located in the United States, particularly in Silicon Valley.

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Further, according to EY, the United States in 2015 “saw more companies achieve unicorn status than in any previous year,” referring to the status achieved by venture-backed private technology companies under 10 years old that are valued at $1 billion or more.

The Journal noted that SoftBank “announced the $100 billion SoftBank Vision Fund nearly a month before the election, when most pundits expected Mr. Trump to lose. Given its size, the fund was likely to put most of its money in the U.S., still home to the world’s most-promising technology companies. Last quarter, 60% of the money raised by companies backed by venture capital was in North America, according to a report by KPMG and CB Insights.”

“Son must have intended as much as half of the Vision Fund to go to the U.S., as he’s aware that there are great companies in Silicon Valley. But he chose this time to announce it as Trump is now going to be the next president,” Jun Tanabe, a SoftBank analyst at JPMorgan Securities in Tokyo, told The Post. Tanabe said that it is not rare to invest in the United States but that it was surprising that the announcement committed to specific dollar figures and numbers of jobs.

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“I think he was trying to build a good relationship and a good business environment,” Tanabe said.

The Pinocchio Test

We always encourage our readers to check out the facts when something sounds too good to be true. That also applies to Trump’s claims of saving American jobs from fleeing or attracting new jobs to the United States because of his election.

Analysts in Japan and the United States say a mix of factors led to Son’s announcement of his U.S. investments after Trump’s meeting. The United States leads the world in venture capital investments and has some of the most promising tech companies and start-ups. So it is likely that Son already had planned on investing in U.S. companies, no matter who won the presidential election.

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After all, the $100 billion SoftBank Vision Fund was announced three weeks before the U.S. elections, when Trump faced a narrow path to victory. The United States outpaces all other countries in venture capital investments, and it is questionable that none of the $100 billion would have gone to the vibrant and promising tech industry in America, regardless of whether Trump was elected.

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Still, the election results may have cheered Son. He has said Trump “would do a lot of deregulation” that could favor investors, including himself. And it certainly would not hurt his business aspirations to get on the good side of a politician with an outsize ego.

There are too many unknowns right now for us to issue a rating. Neither Trump nor Son has revealed all the details of the conversation. SoftBank has not yet clarified whether or how much the company intended to invest in the U.S. technology industry before Trump’s election. But count us among those who are dubious of Trump’s claim that Son attributed the election as the sole catalyst for the company’s investment in the U.S. tech industry. We will update this rating if new and relevant information emerges. But, in the meantime, readers should be wary of the spin.

Verdict Pending

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