Where the Son doesn’t shine
What we can learn from the intersection of technology and real estate from the founder of SoftBank, Masayashi Son
The emergence of new competitors, technological breakthroughs, and evolving infrastructure can swiftly undermine incumbents in high-growth sectors. Some weeks ago, there was extreme volatility in Danish pharmaceutical Novo Nordisk’s share price. The company’s stock plunged the most on record after its experimental obesity drug, CagriSema, failed to deliver the weight-loss results analysts had anticipated. Patients lost an average of 20.4% of their weight over 68 weeks, falling short of the 25% target Novo had projected for its next-generation treatment, expected in 2026. This performance raised concerns about Novo’s ability to maintain its dominance in the rapidly expanding weight-loss market, projected to reach $130bn by 2030. The 27% drop in its share price briefly wiped more than $120bn from Novo’s market capitalization.
More recently, Chinese start-up DeepSeek launched a free AI assistant that overtook ChatGPT in downloads from Apple’s app store. The impact was immediate: investors offloaded tech stocks, leading to a $593bn decline in Nvidia’s market value—the largest single-day loss ever recorded on Wall Street.
High-growth industries frequently disrupt adjacent markets. While they may not significantly alter real estate investment values, they are reshaping how investment decisions are made. The adoption of AI and data-driven strategies is accelerating, not just in technology but also in historically slower-moving industries like real estate. One example is BlackRock, whose real estate division is finalising an AI-powered investment committee member. According to Paul Tebbit, Global Co-Head of Real Estate at BlackRock, the tool is being designed to enhance investment decisions as the sector increasingly integrates AI-driven analytics. Speaking at Bisnow’s London Real Estate Leadership: 2025 Forecast, Tebbit emphasised how AI is transforming capital allocation strategies. Other firms are following suit, with JLL developing its own generative AI tool, JLL GPT, to predict investor behaviour and identify optimal investment targets.
Akshay Naheta, a (now former) SoftBank Group employee veered between hunting for investment targets and seeking out trading opportunities. One such bet involved Nvidia. SoftBank had acquired a stake in December 2016 for $2.8bn, which was transferred to the Vision Fund nine months later. Calculating that the shares were undervalued, Naheta accumulated a $4bn stake in Nvidia involving a hedging strategy known as a 'collar'. While the strategy limited large upside gains, it also protected the investor against large losses. As he predicted, Nvidia's shares rose on the back of strong earnings only to tail off, leaving SoftBank with substantial losses. Naheta's derivative trade cushioned the blow, but Masayoshi Son, the indomitable founder of SoftBank was reportedly furious, as depicted in “Gambling Man: The Wild Ride of Japan’s Masayoshi Son” by the former editor of the Financial Times, Lionel Barber. Loss prevention in high growth strategies are replicable in the real estate industry, but vertiginous rises in valuation, isn’t.
SoftBank serves as a case study in the stark differences between underwriting high-growth, high-risk sectors and investing in real estate. In its early years, SoftBank followed a measured strategy, steadily expanding through software distribution and telecommunications partnerships. Masa made strategic acquisitions, such as the Ziff-Davis publishing business, and secured joint ventures with firms like Novell. This conservative approach helped SoftBank establish itself as a dominant distributions business and technology player in Japan before venturing into global investments.
Masa’s willingness to defy conventional investment logic was evident from the company’s inception. Between 1980 and 1982, he transformed SoftBank from a modest three-person operation into Japan’s leading software distributor, capturing 75% of the market. His success was often the result of impeccable timing, an ability to spot trends before others, and an unwavering willingness to take extreme risks on his convictions.
Masa’s maverick approach to dealmaking became legendary—he was known for signing multi-billion-dollar investment agreements on napkins within minutes. One of the earliest and most famous examples of this approach was his 1995 recruitment of Ron Fisher in 1995 to lead SoftBank’s U.S. operations. Their agreement was reportedly sealed in an informal, trust-based manner, reinforcing Son’s belief that personal conviction mattered more than paperwork. Fisher, however, warned him against relying solely on gut instinct, cautioning that as SoftBank expanded, he would inevitably encounter tougher business counterparts. Masa’s response was characteristically bold and dismissive: “That’s their problem, not my problem. I’m not going to change how I work.”
A similar episode occurred years later when Nikesh Arora, a former Google executive, joined SoftBank in 2014. Son famously offered Arora a lucrative compensation package, sealing the deal on a napkin, another testament to his instinct-driven approach to business.
By 2014, SoftBank had transitioned from a disciplined growth company to a high-stakes venture capital powerhouse. Rajeev Misra, a seasoned banker with a background at Deutsche Bank and UBS, joined SoftBank and played a pivotal role in launching the $100 billion Vision Fund. Mark Schwartz, a former Vice Chairman at Goldman Sachs and Chairman of Goldman Sachs Asia Pacific, brought deep financial expertise to the board. Concerned about the company’s increasingly speculative approach, Misra and Schwartz confronted Masa Son. But when they voiced their concerns, Masa simply smiled—a knowing response that had become his trademark.
He had seen scepticism before. In 1999, SoftBank’s board had fiercely opposed his decision to invest $20m in Alibaba. Masa alone believed in Jack Ma’s vision of a global internet powerhouse. The investment, once ridiculed, later turned into tens of billions of dollars, cementing Masa’s reputation as a visionary willing to defy conventional wisdom. “Many people were laughing at me,” he later recalled. “They said, That guy’s really dumb. He’s a nice guy, but dumb.”
This high-conviction, impulsive style worked spectacularly in tech but proved disastrous in real estate, where patient capital, market cycles, and deep fundamental analysis are critical. He built an empire by aggressively investing in transformative technology companies, with early bets on Yahoo! (although he inherited this stake via overpaying for the Ziff-Davis publishing business) and Alibaba, becoming some of the most lucrative tech investments ever made. SoftBank’s ability to identify cutting-edge firms and inject massive capital helped shape the modern internet economy.
However, this same strategy of overpaying for assets in anticipation of exponential growth proved disastrous when applied to real estate.
One of the most infamous examples was SoftBank’s investment in WeWork. Masa Son believed in the grand vision of Adam Neumann and backed the company at a $47bn valuation, despite its lack of profitability. The gamble collapsed spectacularly, wiping out billions as WeWork’s business model failed to justify its sky-high valuation. Similarly, SoftBank’s investments in Housing.com and OYO saw inflated valuations that ultimately proved unsustainable, highlighting the fundamental differences between venture capital investing and real estate economics.
The contrast between SoftBank’s successes in technology and its struggles in real estate underscores a critical point: real estate cannot be underwritten like venture capital. The growth rates simply do not allow for the kind of aggressive valuation uplifts seen in SoftBank’s tech investments. Masa’s philosophy of overpaying for assets with strong tailwinds was effective in tech but disastrous in real estate, where appreciation is slower and more predictable. Property investments must be grounded in fundamentals, as speculative, high-growth assumptions do not align with the nature of the asset class.
Yet, the convergence of AI and real estate suggests that property investors must be more adaptive than ever. The question is not whether AI will reshape the sector—it already is—but how investors will leverage it to maintain real estate’s core strengths of stability and long-term value creation while tapping into the efficiency and analytical power of technology.