SoftBank founder Masayoshi Son has proposed the establishment of a U.S.-Japan sovereign wealth fund with an initial capital of up to $300 billion. The idea is to make large-scale investments in technology and infrastructure projects across the United States through a joint U.S.-Japan sovereign wealth fund.

According to reports by three sources familiar with the matter, as cited by the Financial Times, this idea has been raised at the highest political levels in both Washington and Tokyo and could serve as a model for other governments to strengthen their investment ties with the U.S. Masayoshi Son has directly discussed the plan with U.S. Treasury Secretary Janet Yellen and has briefed other senior government officials in both countries, but it has not yet been finalized into a formal proposal.

A spokesperson for the U.S. Treasury declined to comment. SoftBank also declined to comment. However, in recent weeks, as Japanese negotiators and the Trump administration have moved closer to reaching a trade agreement, the idea of establishing a joint sovereign wealth fund has been brought up multiple times.

Japan insists on zero tariffs, while the U.S. side has made it clear that its tariffs will not be lower than a "benchmark" of 10%. However, after Prime Minister Shinzo Abe spoke with President Trump on Friday, he told Japanese media that it was now expected that their meeting during the G7 summit in Canada in mid-June would become a "milestone" in negotiations.

Under the proposed structure of the joint sovereign wealth fund, the U.S. Department of the Treasury and Japan's Ministry of Finance would be co-owners and operators of the fund, each holding significant stakes. They would then open the fund to other limited partner investors and may offer opportunities for U.S. and Japanese citizens to own shares.

One person familiar with the matter said that for the fund to effectively achieve its investment goals, it must be "large-scale" - with an initial capital potentially as high as $300 billion and equipped with high leverage. According to insiders, the appeal of the joint fund lies in its ability to provide revenue streams for both governments.

"In theory, Yellen is looking for revenue sources for the U.S. Treasury that do not involve tax increases, regardless of how unimaginable this joint fund sounds; in theory, it can provide such revenue sources," one person said, noting that the idea was considered a clear break from previous strategies.

The person added that Yellen wanted something that could serve as a blueprint for a new inter-sovereign financial architecture, while Japan sought a well-governed alliance to protect itself from temporary political decisions made in the White House's Oval Office.

The person added that in the past, the U.S. federal government or states would provide tax incentives to attract major direct investors to build factories or infrastructure projects. The expectation behind this strategy was that the government would indirectly benefit from taxes in the long run. However, the investments made by the envisioned joint fund would directly yield profits proportionate to the original investment.

Masayoshi Son has a close relationship with Trump and visited the incoming president's Mar-a-Lago estate last December as an important guest. Two sources familiar with the matter said that Son has been a key figure in the joint fund proposal and hopes to eventually play a role in guiding the fund's investment decisions.

Son announced the $500 billion "Gateway" project with Trump in January, which will work with OpenAI and Oracle to build data centers and artificial intelligence infrastructure in the U.S. A person familiar with Son's thinking said that projects like these might attract investments from the proposed wealth fund.

Original source: https://www.toutiao.com/article/1833107922321415/

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