New Delhi: Billionaire Masayoshi Son, founder and chief executive of SoftBank Group, wants to be remembered as the “crazy guy who bet on the future.”
Son made a huge wager on the future earlier this year by buying chip designer ARM Holdings Plc for more than $32 billion. He expects ARM to sell 1 trillion chips over the next two decades as everyday devices are fitted with the chips that the company makes.
Son expects devices fitted with chips to surpass humans in terms of intelligence in a few years. In 30 years, he expects them to be about a billion times smarter than humans.
“When those super intelligence goes into robots, those robots with the super intelligence will change our lives,” Son said in a conversation with Mint editor R. Sukumar at the Hindustan Times Leadership Summit 2016 on Saturday.
My first question to you is really about the acquisition of ARM- the British chip company... What role do you see for ARM in the future?
I think many people don’t know the name of the company ARM. Everybody knows Intel. But did you know the fact that the number of chips that ARM shipped is 40 times bigger than Intel last year. So any of you who own a smartphone, 99% of whatever smartphone you have in your pocket is all ARM. iPhone, Samsung, Huawei, HTC or Indian brands, they are all ARM.
This is the company I bet on the acquisition. We paid $32 billion in cash just a few months ago. This was the largest technology company acquisition at that time and so many people said you are out of your mind. We paid over 40% premium on the company and that was already public company in the UK. But the way I look at it I was saying to myself I am such a lucky man. I got the company so cheap, because you know, over the next years ARM is going to ship one trillion chips. So last year ARM shipped 50 billion chips. Just remember the population on the earth is seven billion. So that means two ARM chips were purchased by entire world population in one year last year.
Last year, this is the fact. But over the next 20 years, ARM is going to ship one trillion chips. One trillion is the number you can say but is difficult to imagine. So this is the company that is going to ship the chip for electricity, light, your automatic electronic door. So today if you buy an average new car, 500 ARM chips are in the car, 500! Did you ever notice, did you ever think of that but that key is, if you think about the company, how many other companies can you think of. And product volumes continue to increase exponentially over the next 20 years.
Can you think of any other company that has 90% market share in the key industry of the segment? Can you think of life without chip anymore, as I said two ARM chip in one year worldwide. So the life our mankind can never function anymore without a chip and 90% of those chips are ARM. So this is why I said, okay let’s not make a small categorisation, let’s just make a big and simple categorisation. If one chip is $1, its $1 trillion.
I want you to elaborate a little more on the future... I am going to ask you to look 30 years from now and help our audience help me understand how do you see the future.
I am actually better at predicting or talking about 30 years later than three years. Before talking about 30 years, how many of you know the vocabulary called ‘Singularity,’ what does Singularity mean? Please raise your hand if you know the meaning of Singularity.
So 5% of you know about it and 95% of you don’t know about it yet. But this is the word 10 years from now 20 years from now 30 years now everybody said wow Singularity! This is the most important subject we have to discuss about. So if I ask you the same question two years ago about it is, people raise hand. Maybe this audience little bit higher educated audience than others.
But anyways, Singularity means that computer intelligence surpass human intelligence. Okay, so what does it mean. Computer intelligence is binary system. 0 or 1, or a bench of 0 or 1. Human brain is actually also a binary system. So how many binary systems do you have in your head? Do you ever give a thought to that? We all have about 30 billion binary systems in our brain. Thirty billion neurons. Thirty billion neurons attached, that is actually same functionality as computer chip. Computer chip has transistor. Transistor on and off, this is binary system. So if you think of our brain as a simplified manner, it’s a function of how many binary systems you have in your head.
So 20 years ago I have estimated when one-chip computer one-chip microprocessor will have a binary system: the number of transistors surpassing 30 billion. When does the chip surpass 30 billion. Twenty years ago I estimated and I said year 2018. Five years ago I recalculated again, and again it was 2018. Two years from now one chip will have a 30 billion transistors. So function wise our brain and one chip computer become almost equivalent. I don’t care whether it is five years early or five years later because the trend is the most important. Thirty years from now what happens is not 5x, it is to be 1 billionX. If we compare our brain versus a mouse, which is smarter. Most of the time we are smarter than the mouse. So it’s functionally big proportional depending on the number of neurons you have in your brain. Mouse, mosquito, monkey, man—the more neurons we have the smarter we are.
So it is a function of transistors. When that number of transistors in one million times more than our brain I would bet they will be so much smarter than us. So when that happens, our definition of life will be re-defined in many, many subjects.
When we mankind were the smartest on the earth now, this is the first time we mankind face someone who is so much smarter than. When we compare our mankind’s brain’s functionality typical number we talk about its IQ. Our average is 100, Da Vinci or Einstein is now roughly about 200. So if you have 200 IQ you are called a genius. Now, this transistor computer, when they have a million times more transistors, binary systems than us, their IQ is counted as 10,000. Two hundred is genius, what should we call them as who as 10,000 IQ. So when that happens, when those super intelligence goes into robots, those robots with the super intelligence will change our lives. Those IoTs, Internet of things, that goes to not just robots but your TV, your car, your whatever the simple device. Those guys become super intelligent. Our life will change.
Imagine, I said, our company ARM will ship one trillion chips. You imagine the world surrounded with one trillion chips. Many of them are so much smarter than us is many different aspects. The life is changed. So if you think of all the mobile technology, 30 years ago and now how much it has changed. In the speed of engine how much it has functionally changed. It was four wheels 30 years ago, and it is still four wheels. So not much changed, but the way computing give us the change in our life is going to be tremendous.
So let’s think about our future—Is it an exciting future, a dangerous future? I think it’s an exciting future.
What is the role for humans in the future when the device that you are wearing is 1,000 times smarter than you are?
Why I think it is exciting is because there are many many issues we cannot solve by ourselves by our ability. But we can use them as our companion, use them as our family members, use them as our business alliance partners. We can ask them many questions, we can associate wisdom. I think there are many disease we cannot solve today. Those diseases kill our family members and friends. If our family members and friends live more longer, I think it’s a happier life. So I think there are many many things that help our life to be better. Of course there are always bad guys and those bad guys use them in the wrong way, then life can be miserable. That’s why we have to think about the future. We have to think about the moves of our future—the way we eat, the way we associate with them.
So when we have sci-fi movies there are all kinds of ETs coming from wherever, I think before worrying about the ET from outer space, we should seriously discuss about the new reality that is coming in front of us. Which is super intelligence against us.
...translate that into the kind of geographies you should look at when you are investing, the kind of countries you should look at, the kind of technologies and companies. Tell us a little bit about that.
Fifteen year ago we made a lot of investments in China. Five years before that I made a lot of investments in Japan. Ten years before that I made a lot of investments in United States. All of them were regarding information and technology, regarding Internet related companies. So now I said it is a time machine, very secretly the same kind of technology continued to evolve. Geography-wise I think now India has the best opportunity in front of us. That’s the reason why I came here today.
A country with such as large population, this is the country with the biggest population that is a democracy. This is a country where many of you speak English, this is a country where I think new technology is going to happen and new excitement is coming in front of us. This is the country that I am very much interested in investing so I have already said when PM Modi became the prime minister I had a meeting in Tokyo. In the first meeting I said I would love to invest, I would like to contribute to the success of India going forward. I try to invest $10 billion into India in next 10 years.
I am a man who keeps my word.
So we have already invested $2 billion in the last couple of years, eight more years need to go. I am going to surpass my word of the commitment. Well now I have $100 billion fund that we have just announced last month, SoftBank we put our own cash. I just came here this afternoon from Saudi Arabia. So we have Saudi Arabia as a partner fund and a few other investors. Just last month we announced that SoftBank will put $25 billion, Saudi Arabia will put $45 billion, so out of $100 billion I had the vision, already $75 billion is basically committed. So the remaining $30 billion, I have a few investors that I am talking to and I think we are over-subscribed.
So this is the size. $100 billion is easy to remember. This is the capital of AIIB (Asian Infrastructure Investment Bank). This is the size that is two-and-a-half times bigger than all of the venture capitalist funding in the United States, two-and-a-half times bigger than all of that added together. So at least I think I can deliver my word I said I will invest $10 billion in India. At least I got the funding, I am just looking for opportunities to make those investments and I think we will find enough opportunities. I have already said we are committing to make a lot of investment for solar power generation in India and we have lots of Internet related companies in India that we have invested and we will continue to expand on them.
You recently launched a robot... How far away is that, when do you see that happening?
So many of you know about our company’s robot called Pepper. It has the shape of a human. We have shipped over 10,000 humanoid robots over the last couple of years. But there are so many robots in the factory making assembly lines, there are all kinds of other robots. I am not trying to chase what other people are doing. This is the first robot that has the emotion. Only God creates beings with emotion. Mankind never created, or any other being has created, something which has emotion today.
So the reason why I created this is because as I said Singularity is coming. Super intelligent things are coming. Those robots with the super intelligence if they are going only after productivity, there are so smart and they are only going after productivity we would be in a dangerous society. So many of you think if those super intelligent beings have emotion it could be super dangerous. I think it is just the opposite. Why does man not kill another man without reason. We do not kill other people in the daily life because we have emotion because we feel the pain in our heart killing the other people. We feel pain in our moral to do something bad to the other people, your family or friends or anybody on the streets, you feel bad you feel pain. It is your emotion.
So when you develop robots with super intelligence with a good emotion they would try to take care of us rather than they become just a productivity machine. If you imagine a man who is so smart but with no heart, do you want to welcome them in your family in your friends. No you want to bring in your family or friends a guy who is not the smartest if a guy has a good heart if a person has a great heart you would rather have them as your friend. So I am developing an intelligent robot with a good heart.
So this is just the beginning. The first step is to see the emotion of the family member—how do we do that. We analyse the tone of the voice. We analyse the face of you. So how do you analyse your friend’s or family’s emotion. You look at their face, if the face look angry you saw aww please calm down, if the face is big smile you are also happy. You understand if the person is happy or sad by facial expressions. The other thing is the tone of the voice. (Goes on to say “I like you” in different ways). Tone of the voice means a lot so we analyse the tone of the voice. We analyse the face, we analyse the emotion.
Now is the second stage and we are already in the second stage. Pepper itself has a primitive emotion. Pepper wants to be happier. How does Pepper become happier? If Pepper sees a happy face in the family, Pepper feels good. If Pepper sees a sad face, Pepper feels sad. That is how our emotions also function basically. I am sorry I didn’t bring the actual Pepper here. Sometime soon. It’s great to have Pepper with me and I’ll show you a demo. So we are doing this together in the Medical School of Tokyo University. Tokyo University is the number one school in Japan. I am the first original inventor. I have myself filed more than 100 patents.
So anyways it’s a long journey, Mankind had two thousand years of history, Pepper had only two years of history. Long way to go but I am going to continue my work on that.
Sometimes when you make bets like these you also lose a lot... how do you comeback from that?
Beyond a number, it is only a number.
Did you know who was the number two richest guy next to Bill Gates in that year. Well, actually I was richer than Bill Gates for three days! So in that year, my net worth was growing like $10 billion a day and I start asking to myself what is money. The way I look at my friends or other people I start to get affected. I started losing the joy of shopping. I go to department store and I don’t know the excitement, I can buy the entire department store instead of the one bag. So I lost excitement of shopping, so it’s sad. It’s actually sad to be rich! Only thing I was thinking in those days is how should I donate, where should I donate and I couldn’t come up with a great answer. That was a bad headache. But before I got the answer to my question next year I lost 99% of that. So I didn’t need the answer to my question. But in that year 2000, I actually became happy. After losing 99% I said now I have to work, now I feel the joy of work, now I feel the value of money again. I was almost broke—99%—but we survived and somehow I am continuing to run the company.
So I am excited again, after having touch time now I understand the vibe again and I am still betting for the future.
What’s your secret? The whole thing about seeing the future betting on the future. Is this a skill that can be acquired?
Well half is your effort, the other half is I don’t know.
When I was a kid, our family was not that rich. Maybe a little bit above the average. When I was really small our family was so much poor. My family migrated from South Korea to Japan to start from zero, negative actually. So very very poor as a boy as a kid. Then my father was so much and made little money, we became little bit average or above average. But whenever I was going to play with my other kids in the summer time I wanted to eat ice candy. I buy ice candy with my little money I had but with all the remaining money I bought the candy for all my other friends so that I can enjoy eating without feeling bad.
So my grandmother saw me doing that and she said ‘Masa why are you doing that. Money is important, money is precious. Don’t waste money. You are wasting your money.’ I said no grandma I am not wasting my money, I am giving to my friends. That is not wasting, that’s a friendship. And she said money is not unlimited, you will lose all your money if you continue to do that. I was like 10 years old. I said grandma maybe I understand what you are trying to say but I said to be ‘money is going to come from the heaven. When I grow up, money is going to come from the heaven as long as I do good things. When the money comes from the heaven, I will give to my friends again!’ And she said ‘you are hopeless!’
So anyway, half I am born like this since I am a little kid, the other half is my effort. I try to be a meaningful person. So that is my effort.
What do you do in your free time?
I used to do those a lot when I was younger. I am busy now so I don’t have much time to at least read the paper books. I read a lot on the Internet but not the novels. I read a lot of news and other business material but I have free time. Once in a while I play golf.
At least right after my announcement of acquisition of ARM, which was my largest acquisition. In the months I shot in my golf the best ever score in my life.
Acquisition you can do if have money. In the golf, I shot 68! 68 cannot be bought with money. But seriously I was so happy that I was able to acquire ARM. I was dreaming of that company for 10 years, and I didn’t have enough money. So last 10 years I was dreaming of this company ARM. Finally I got enough money that I was able to buy this company.
How would you like history to remember you?
Crazy guy who bet on the future!