However, Asia is also the region that, according to the International Energy Agency (IEA), has two growth engines: China and India, which are leading the continent’s renewable adaptation campaign. Southeast Asian countries also possess immense potential. Should the region double down on green sources to future-proof its energy security and economic outlook?

Rana Adib, the Executive Director of REN21, the global network of diverse stakeholders that enables the necessary changes to build the renewables economy for prosperous lives and societies, shared her insights on Asia’s renewable pursuit in an exclusive interview with International Finance.

An engineer by training, Rana Adib has worked in the private sector and applied research in the fields of renewable energy, energy access, waste management, and the biomethane sector. With her cross-functional profile, she likes to provide solutions that pave the way for a world built on renewable energy. She is also the chair of SLOCAT, an international multi-stakeholder partnership enabling knowledge and action for sustainable, low-carbon transport.

Here are the excerpts from the interview

With crude oil staying above $100 and disruptions in the Gulf, how do you see the global economy coping with this prolonged energy crisis?

In the short term, countries are focused on securing supply and managing demand through measures such as stock releases, subsidies and supply diversification. These can help cushion the immediate impact, but they do not address the underlying structural exposure. With around 20% of global oil trade passing through the Strait of Hormuz, disruptions quickly translate into higher energy prices, inflationary pressure and impacts on industrial competitiveness, particularly in import-dependent economies across Asia and Europe.

This situation highlights a broader point: systems that rely heavily on traded fossil fuels remain inherently exposed to geopolitical risks and price volatility.

After repeated energy shocks since 2022, do you think renewables are shifting from an option to a necessity?

Yes — increasingly, this shift is being driven by affordability, efficiency and resilience. Renewables are now among the lowest-cost sources of new power in many regions and offer greater price stability, unlike fossil fuels, whose costs are subject to global market fluctuations. As prices rise, households and industries are directly affected, while renewables combined with electrification can reduce long-term exposure to these shocks.

At the same time, energy efficiency is becoming more central. Electrified solutions such as electric vehicles and heat pumps are significantly more efficient than combustion-based systems, meaning less energy is required to deliver the same services — helping to lower costs and reduce vulnerability. Countries that rely heavily on imported fossil fuels remain structurally exposed. By contrast, systems built on renewables, electrification, efficiency and flexibility can improve resilience over time. In this context, renewables are increasingly seen not only as a climate solution, but as a key component of economic stability and energy security.

What is the likelihood of Asian governments accelerating the transition to alternatives beyond petrol, diesel, and gas?

In many cases, the current context is likely to reinforce this direction, although the transition may not be linear. Some governments may adopt short-term measures involving fossil fuels to manage immediate pressures. At the same time, the crisis is strengthening the case for electric mobility, public transport, clean electricity, storage and heat pumps, as well as for expanding domestic renewable energy supply. Given Asia’s significant reliance on imported fuels, there is a growing incentive to reduce exposure through electrification, energy efficiency and locally available renewable resources.

With global EV sales reaching 1.1 million units in February 2026, do you expect this growth to sustain or peak soon?

The outlook is likely to be more nuanced rather than indicating a clear peak. Overall, car sales may face downward pressure due to weaker consumer spending and broader economic uncertainty. However, the key trend is that the share of EVs within total car sales continues to increase. EVs represented over 20% of global car sales in 2024 and are on track to exceed 25% in 2025. In leading markets, shares are already significantly higher, including around 50% in China, while others such as South Korea (around 10%), Japan (around 2%–3%) and India (around 3%) remain at earlier stages, highlighting significant room for growth.

This suggests that accelerating investment in EVs, charging infrastructure and enabling policies could play an important role in reducing fuel import dependence and strengthening energy security.

Should automakers prioritise affordability to meet rising EV demand?

Affordability is now central to the next phase of EV adoption. Automakers are already shifting in this direction, driven by weaker consumer demand, geopolitical pressures and rising competition. At the same time, EV economics have improved significantly. In many markets, EVs are already cheaper to own and operate over their lifetime, and upfront costs are moving toward parity. The challenge is therefore no longer technology, but access — ensuring affordable options, financing and scale for mass-market adoption.

With countries like China, India, and Japan leading renewable adoption, should other Asian economies follow more aggressively?

The broader regional trend suggests increasing momentum, but the current crisis also shows that the transition is not always linear. In the short term, many countries are focused on securing fuel supply and managing demand, including subsidies, diversification, and emergency measures. However, this situation is already reinforcing the case for accelerating renewables, electrification and energy efficiency as more durable solutions.

China and India continue to drive large-scale renewable deployment, while Japan is expanding within a more constrained system. South Korea is also pursuing more ambitious renewable expansion plans, particularly in solar and offshore wind. At the same time, other Asian economies remain at earlier stages, highlighting significant room for growth. Countries that have already expanded domestic renewable capacity are generally less exposed to price volatility, which is becoming an increasingly important consideration.

Scaling up renewables, electrification, and efficiency can help reduce exposure to volatile fuel import costs, in addition to improving resilience to external shocks, supporting domestic economic development and new industries. In this context, accelerating the transition is increasingly seen not only as a climate priority, but as a strategic economic and energy security decision.

Despite leading Asia’s renewable adoption charge, Japan and South Korea are feeling the brunt of the global energy crisis, given their dependence on imported fuel. Should these nations take a hard look at their energy sourcing practices?

The current crisis underscores the structural dependence of both countries on imported fuels. Japan sources the vast majority of its crude oil (around 90%) from the Middle East, while South Korea imports roughly two-thirds from the same region, with much of this supply transiting through key chokepoints, such as the Strait of Hormuz. While both maintain strategic reserves, these provide only a short-term buffer.

Reducing this exposure over time will depend on accelerating domestic renewables, electrification, grid and storage infrastructure, and energy efficiency. More broadly, this reflects a shift in how energy security is being understood, from securing fuel supply to reducing reliance on imported fuels altogether.

Japan, after the 2011 Fukushima disaster, took a backseat in expanding its nuclear industry. Do you see things changing in this front post-Gulf crisis?

Japan’s energy policy had already begun evolving before the current crisis, with a more balanced approach that includes both renewable expansion and a gradual return of nuclear power. The current context may reinforce discussions around nuclear energy in terms of energy security. However, nuclear developments typically involve long timelines and remain subject to public acceptance considerations. In the near term, measures such as accelerating renewables, electrification and energy efficiency are likely to play a more immediate role in strengthening energy resilience.

The post Renewable shift is being driven by affordability, efficiency and resilience: Rana Adib appeared first on International Finance.

Antony Froggatt, Senior Director for Aviation, Climate, Energy, and Shipping at T&E, a Brussels-based NGO advocating clean transport and energy, told International Finance, “Many forecasters, such as the IMF (If energy prices sustain just a 10% increase over one year, this would add 0.4 percentage point to inflation and slow economic growth by 0.1%-0.2%,) and Fitch, suggest that higher energy prices will negatively affect global inflation and reduce global growth. The extent of these will depend on how high prices get, and how long they remain high.”

Jan Rosenow, Professor of Energy and Climate Policy at Oxford University and Senior Associate at Cambridge University, said, “The short-term pain is real. Higher inflation, squeezed household budgets, and recession risk in energy-intensive economies. But the adjustment mechanisms are also kicking in: strategic reserve releases, demand destruction, and accelerated supply from non-Gulf producers. The deeper concern is duration. A shock that lasts months reshapes investment decisions in ways that a spike lasting weeks does not.”

Clean energy pivot: A Must For Asia Now

In 2026, Asia has become the Europe of 2022. Back then, Russia, in response to the Western sanctions for the Ukraine war, significantly cut natural gas supplies to the continent, resulting in high energy prices and a cost-of-living crisis. Asia, which buys more than 80% of the crude that transits the Strait of Hormuz, is now facing an “energy emergency.”

This could prompt Asia to have a re-look at renewables and initiatives to future- proof both its energy security and economic outlook.

Froggatt commented, “I would argue that renewables have been a necessity for some time, and the economic case for them is even stronger now. As far back as 2020, the International Energy Agency called solar PV the ‘cheapest source of electricity in history’. Since then, the costs of not only renewables (solar and wind), but also storage options, particularly batteries, have continued to fall.”

Rosenow remarked, “Each successive shock – 2022, and now this – makes the economic and security case for domestic clean energy harder to ignore. Renewables are not just cheaper in many markets; they are now the geopolitically safer choice. The question is no longer whether to accelerate the transition but how fast institutions can move.”

EV: The Best Starting Point

Stating that higher fossil fuel prices affect consumers’ cost of living and the balance of payments of importing countries, Froggatt believes episodes like the 1970s global oil price spikes, and the European energy crisis in 2022 will only motivate policymakers to accelerate their efforts to limit their dependence on fossil fuels for economic and supply security reasons.

“We saw this in the EU with the introduction of the ‘Fit for 55’ package in 2022 to accelerate the transition away from imported fossil fuels. However, the majority of these measures will take time to have an effect. If we want to really reduce dependency on fossil fuel, structural changes with new investment are needed, particularly in infrastructure, such as the grids and buildings,” he stated.

Rosenow, on the other hand, remarked, “The pressure is certainly there. Asia bears the heaviest volumetric burden from Hormuz disruptions, and governments that were already energy-insecure are now facing acute supply anxiety. I’d expect faster permitting of renewables, more serious electrification policy, and renewed interest in long-term LNG alternatives – though the pace will vary significantly by country.”

To deal with the “energy emergency,” Asian countries are advocating solutions like a four-day workweek and preventing unnecessary travel to save fuel. This might make electric vehicles more attractive.

Froggatt says, “I would assume that sales will continue to increase. Globally, only around 10% of car sales are electric, but in leading countries, such as China and Vietnam, we are already seeing over 40% of car sales being electric. Consequently, as the cost of electric vehicles continues to fall and charging infrastructure becomes more available and robust, the pace of sales growth will accelerate, especially in an era of high fossil fuel prices.”

Froggatt also pointed out that in Europe, car manufacturers have failed to develop smaller, low-cost EVs fast enough. This is part of the reason why Chinese vehicles are entering the EU market so quickly.

“I think it is incumbent on all car manufacturers to make EVs to meet a variety of consumer requirements, which include those that are most affordable,” he said.

So, Asia should focus on the affordability factor, introducing tax credits for consumers, apart from setting up intensive charging networks.

“There have been significant cost reductions already. And in many markets, EVs are close to or at cost-parity over their lifetime. Further cost reductions are needed to shift the market faster to EVs,” Rosenow noted, while adding, “The underlying drivers – policy support, falling battery costs, expanding model ranges – remain intact. Short-term, high fuel prices actually reinforce the EV value proposition. The risk to growth is on the supply side: critical mineral availability and manufacturing capacity. I don’t see a near-term peak, but the rate of growth will inevitably moderate as markets mature.”

The Continent Holds Promise

As per the International Energy Agency’s (IEA) Renewables 2025 report, two of Asia’s growth engines, China and India, along with the United States and Europe, were responsible for clean energy’s global expansion. Southeast Asia holds promises too. With an estimated 20 terawatts of untapped solar and wind potential (equivalent to around 55 times the region’s current total power capacity), the IEA sees the region as being more than capable of securing its energy security through the renewable route.

“The case for doing so has never been stronger. Energy import dependence is now visibly a security and economic liability, not just an environmental one. Southeast Asian economies, in particular, have strong renewable resource endowments – solar, geothermal, offshore wind – that remain underexploited. The Gulf crisis should be the catalyst for a serious regional rethink,” Rosenow said.

Froggatt too observed, “It is not just countries in Asia that can and should accelerate their use of renewable energy. Without accelerating deployment in the EU, the 2030 renewable energy target of at least 42.5% of energy from renewables will not be met. In developing countries, renewable energy is a way to meet rapidly increasing demand. Governments can take several steps to support the renewable energy sector. They can reduce construction risks and costs through accelerated planning, grants, soft loans, and other measures. Furthermore, they can implement support schemes, such as contracts for difference or feed-in tariffs, that create stable revenues. Governments can also help develop local supply chains, which provide additional price security and create local jobs. Finally, governments can set targets for renewable energy use, which gives confidence to investors.”

While noting that higher rates will raise the cost of capital precisely when deployment needs to accelerate, Rosenow advised, “The policy response matters enormously here: blended finance, public guarantees, and development bank support can reduce the risk premium that makes projects unfinanceable in the private market alone. Countries that get this right will attract investment; those that don’t will fall behind.”

Despite investing heavily in offshore wind, solar, and hydrogen strategies, Japan and South Korea still fulfil a massive chunk of their energy requirements through imported fossil fuels. Both of them are feeling the Hormuz pinch right now.

Rosenow said, “This crisis is a stress test they (Japan and South Korea) were always likely to fail. Both countries have made genuine progress in renewables but remain structurally dependent on imported fossil fuels in ways that leave them exposed to exactly this kind of shock. A serious reassessment of domestic generation capacity is overdue.”

Maybe, it’s time for Japan to shed the ghost of Fukushima.

Froggatt said, “Electricity generated from renewable energy is, under most conditions, far cheaper than that generated by nuclear power. In addition, renewable energy generation is much quicker to build. Therefore, although some countries may look again at nuclear power, I think that the higher costs and slowness to build – especially in countries that don’t already have a nuclear sector – will reduce the number of countries that actually start building nuclear power plants.”

Rosenow concluded, “The political and public calculus on nuclear in Japan was already shifting before this crisis, with several reactors being restarted. A prolonged Gulf disruption accelerates that conversation considerably. Energy security concerns now outweigh, for many policymakers, the post-Fukushima caution. I would expect Japan to move more decisively on restarts over the next few years.”

The post IF Insights: War in Middle East likely to accelerate Asia’s renewable energy revolution appeared first on International Finance.

“Japanese Minister of Finance Satsuki Katayama and South Korean Minister of Economy and Finance Koo Yun-cheol expressed serious concern over the sharp depreciation of the Korean won and the Japanese yen. Furthermore, they reaffirmed that they will closely monitor foreign exchange markets and continue to take appropriate actions against excessive volatility and disorderly movements in exchange rates,” said a media note after the officials met in Tokyo.

The yen touched its lowest in 20 months on 13th March, nearing the line of 160.00 to the dollar that the market analysts think might prompt Tokyo to intervene to support the currency. ‌The ⁠won, on the other hand, breached a psychological barrier of 1,500 per dollar this month for the first time since March 2009.

The Iran war has also driven ⁠the dollar higher on safe-haven demand, apart from battering the currencies of countries heavily reliant on imported oil.

The currency is also gaining as traders reduce expectations for how much the US Federal Reserve might cut borrowing costs in 2026, as worries over rising inflation have reduced the likelihood of interest rate cuts from two before the war to none now.

Tokyo and Seoul shared the view that significant volatility had emerged in financial markets, including foreign exchange, Satsuki Katayama told a press conference after the meeting.

“The Japanese government ⁠is fully prepared to respond at any time, bearing in mind the impact that currency moves may have on people’s livelihoods amid surging oil prices, and I believe both ⁠sides share that understanding,” she added.

Yen, due to its huge trade surplus and enormous net international investment positions, was once used to enjoy unconditional safe-haven status.

However, that position is under threat now, as Joey Chew, head of Asia FX research at HSBC, told Reuters, “The yen can be vulnerable to potential oil supply shocks – it also weakened last year in mid-June amid Israel-Iran tensions.”

The post Japan, South Korea share volatile currency concerns as Yen faces stern test appeared first on International Finance.

However, in this article, International Finance will discuss in detail SoftBank’s rush to forge partnerships with OpenAI and the American tech industry in general, as the ongoing AI boom is also witnessing heavy spending on data centres. In January, OpenAI and SoftBank announced their roadmap to invest $500 million each in California-based SB Energy (a SoftBank-owned company) to expand data centre and power infrastructure for their Stargate initiative. SB Energy will build and operate OpenAI’s previously announced 1.2-gigawatt data centre site in Milam County, Texas.

Talking about Stargate, it is a $500 billion multi-year initiative to build AI data centres for training and inference, backed by major investors including Oracle. SoftBank’s aggressive spending spree on the data centre front comes amid the tech companies’ mad rush to secure their power infrastructure. Energy access is becoming a critical constraint on AI expansion, with the push for larger and more numerous data centres driving electricity demand higher.

SoftBank will also be acquiring Florida-based digital infrastructure investor DigitalBridge Group in a deal valued at $4 billion. Through this, the Japanese company will be penetrating the digital infrastructure segment further, aligning with the vision of its billionaire founder, Masayoshi Son, who has made the United States’ AI boom his investment target. He wants to capitalise on surging demand for the computing capacity that underpins AI applications.

DigitalBridge invests in digital infrastructure sectors such as data centres, cell towers, fibre networks, small-cell systems and edge infrastructure. The company, which as of September 2025 possesses around $108 billion in assets, making it one of the largest dedicated investors in the digital ecosystem, also has a Stargate link.

It, along with OpenAI, Oracle and Abu Dhabi-based tech investor MGX, is investing billions of dollars in the project, under which five new computing sites across Texas, New Mexico and Ohio will have a combined power capacity of about seven gigawatts.

Building an AI war chest

Masayoshi Son’s latest interview with The Times Magazine gave a sneak peek of what is going through his mind, in terms of SoftBank’s road ahead in the AI domain. After making a fortune in software and transferring that success into domains like telecoms and a raft of tech ventures, Son is now preparing SoftBank’s $180 billion war chest for AI.

Be it taking control of chip firms Arm, Graphcore and Ampere Computing, as well as self-driving car start-up Wayve, or the investments into Intel and OpenAI, all of them have one thing in common: Son’s emphasis on artificial superintelligence (ASI), which he envisions becoming “10,000 times smarter than humans within a decade.”

“ASI combined with physical AI (including humanoid robotics) will comprise 10% of global GDP in 10 to 15 years, followed by 30% over 30 years,” Son predicted.

Masayoshi Son is known for following a high-risk, even higher-leveraged investment style that has courted both success and disasters. While the $20 million investment in Chinese e-commerce giant Alibaba (worth close to $200 billion at its peak) gave the SoftBank boss a sort of legendary status, the $18.5 billion he pumped into the now-bankrupt office-sharing venture WeWork also got listed among history’s most bizarre moves.

However, the ongoing AI boom has given Son another opportunity to be a risk-taker. SoftBank shares hit a record high in October 2025, briefly propelling Son to once again become the richest man in Japan. However, he has got a bigger role now: spearheading Silicon Valley’s bet to scale up US data centres and AI infrastructure, thereby writing the rulebook of the Fourth Industrial Revolution (Industry 4.0).

The SoftBank boss has also reportedly proposed a vast $1 trillion AI and robotics complex in Arizona, dubbed “Project Crystal Land,” that will also incorporate a free-trade zone alongside Taiwan’s chipmaking giant TSMC. By tapping into the Donald Trump Administration’s appetite for big numbers, as well as the clamour to reshore chipmaking and reassert American tech leadership against China, Son has pivoted SoftBank as an essential partner toward revamping US AI infrastructure.

And the investment vehicle supercharging SoftBank’s AI pivot is its “Vision Fund.” The entity, apart from being a steady investor in AI companies, including OpenAI, holds stakes in chip designer Arm, along with companies involved in robotics and autonomous vehicles. As of December 2025, through the fund’s strategic investments, the Japanese tech conglomerate has remained a profit-making machine, that too for four consecutive quarters.

In the October-December quarter alone, the venture reported a net profit of 248.6 billion yen (USD 1.62 billion), in a stark reversal of the net loss of 369 billion yen which it had to undergo in the same quarter in 2024. It seems like OpenAI’s rising valuation will also bode well for the conglomerate’s earnings, despite market worries about the risk of overexposure to a single firm.

In March 2026 itself, S&P Global lowered its outlook for SoftBank Group to negative from stable, saying further investments in the Sam Altman-led firm may hurt the Japanese conglomerate’s liquidity and the credit quality of its assets. However, it seems Son doesn’t have immediate plans to move away from the OpenAI bet.

However, the same bet comes at a cost. In November 2025, the SoftBank boss had to take the hard call of liquidating the entire stake ($32.1 million to be precise) in American chipmaking giant NVIDIA to free up investment worth $5.83 billion, along with part of a T-Mobile stake worth $9.17 billion. It wasn’t an easy call for Son, given that Vision Fund was an early backer of NVIDIA, apart from both ventures having a deep relationship, with the tech conglomerate involved in several AI ventures that rely on NVIDIA’s technology, including the Stargate one.

When Masayoshi Son broke his silence on the NVIDIA stake sale, he said, “I respect Jensen (NVIDIA CEO), I respect NVIDIA so much, I don’t want to sell a single share. I just had more need for money to invest in OpenAI, invest in our opportunities, so I was crying to sell NVIDIA shares. If I had more money, of course, I would want to keep NVIDIA shares, all the time, any time.”

Maverick since childhood

Born as the grandchild of Korean immigrants in a small town on Japan’s southernmost island of Kyushu, Masayoshi Son had a humble childhood, living in a shack on a plot of unregistered land. At the age of 16, he read a book written by legendary Japanese businessman Den Fujita, the iconic figure who brought McDonald’s to Japan.

Then he made 60 long-distance phone calls with one intention: to meet the businessman himself. Despite repeated rejections, Son went to Tokyo and turned up uninvited at the McDonald’s head office. He was eventually given a 15-minute audience with Fujita, who gave one piece of advice to the teenager that changed his life forever, which was “focus on future technologies like computers.” It is worth mentioning that Fujita later sat on the SoftBank board.

Masayoshi Son then moved to the United States, completing his high school education at California High School, followed by a course in economics at the University of California, Berkeley. However, one task was quietly shaping Son’s entrepreneurial destiny, dedicating five minutes every day to thinking about inventions and filling hundreds of notebooks.

Son eventually ended up collaborating with Berkeley tutors to invent the world’s first electronic translator, which he later sold to Sharp Corporation. He then started a business importing second-hand arcade game machines from Japan.

Despite setting up a successful business in the United States, Son returned to his homeland to keep a promise he made to his mother. In 1981, the 24-year-old Son established SoftBank. While SoftBank started as a software wholesaler to support the then-upcoming PC industry, in 1982, TIME named the computer its “Machine of the Year,” giving the youngster’s business a solid purpose.

However, he was diagnosed with Hepatitis B. Given three to five years to live, Son took the challenge head-on and underwent pioneering treatment that saved his life. The whole episode only made him more self-confident. And it showed in his rapid rise since then.

In the 1990s, Masayoshi Son invested $3 billion in 800 tech start-ups. In 1996, he paid $100 million for 33% of Yahoo! Three years later, he sold off a chunk of the shares for a huge profit but still retained a 28% stake worth $8.4 billion. He zeroed in on one investment strategy, which is issuing SoftBank bonds to borrow money at rates cheaper than banks.

Then arrived the ill-famed dot-com bubble. During the phase, Son’s net worth used to surge by $10 billion every week, so much so that in February 2000, the SoftBank boss briefly unseated Microsoft co-founder Bill Gates to become the world’s richest person for three days. However, when the bubble burst later that year, SoftBank shed 97% of its value, and Son had to suffer losses worth $70 billion.

However, the beauty of time is that it changes. Alibaba, now an established Chinese conglomerate, was a relatively unknown e-commerce startup in 2000. It got a $20 million bet from Son, and as the company went public in 2014, the same stake became worth $75 billion. As Son sold it, it doubled again, becoming one of his most profitable investments of all time, apart from creating the “Midas Touch” narrative about Son’s bet-taking capabilities.

Telecom investments and blunders

After recovering from the dot-com bubble disaster, Masayoshi Son set his eyes on the broadband segment. However, things weren’t smooth initially, as SoftBank had to struggle to get regulatory approvals in Japan to set up its industry subsidiary.

Things went to the extent where Son stormed into an official’s office at Japan’s telecommunications ministry, clutching a cheap cigarette lighter. While recollecting that episode in an interview with the Wall Street Journal, Son remembered saying to the official, “This is the end. If you don’t help me, I’m going to pour gasoline all over myself right here and set myself on fire with this $1 lighter.”

The situation got better in 2006 when, after acquiring Vodafone’s Japanese subsidiary, the rebranded SoftBank Mobile emerged as a key player in Japanese telecoms. Son successfully persuaded Apple co-founder Steve Jobs to give him the exclusive rights to market the iPhone, history’s most successful consumer electronic product, when it debuted in 2007.

In 2013, he purchased Sprint and turned things around for the struggling US telecom provider before merging it with T-Mobile in 2020, disrupting the AT&T and Verizon duopoly. Although Son is known as a hands-off investor, the Sprint episode was the best example of him rolling up his sleeves and getting things done.

In 2017, he formed the SoftBank Vision Fund with over $100 billion in capital. The entity still maintains its position as the world’s largest private equity fund. He secured some $45 billion from Saudi Arabia’s Public Investment Fund (PIF) following a 45-minute meeting with Crown Prince Mohammed bin Salman.

The fund’s strategy was simple: invest a minimum of $100 million to juice each startup to market dominance by blowing competitors out of the water, and Masayoshi Son called it “blitzscaling.” The entity, by 2019, pumped $76.3 billion into companies like NVIDIA, Uber, WeWork, Paytm, Ola and Flipkart, most of which are market giants in their respective fields.

In 2019, SoftBank launched Vision Fund 2 with a touted value of $108 billion. However, there was a setback, as the entity reportedly managed to secure a paltry $30 billion, mostly self-funded. The original Vision Fund also underperformed, as in 2021 it posted record losses of $27.4 billion amid the haemorrhage of tech stocks. The Ukraine war, COVID-19 lockdowns, and Beijing’s crackdown on its tech giants, many of which were backed by SoftBank, pulled down investor confidence.

And who can forget the WeWork disaster? During his high-profile visit to the United States in December 2016, in which Son met President-Elect Donald Trump, he also interacted with Adam Neumann, the founder of the co-working venture. The deal, famously drawn up during a 12-minute meeting followed by a car ride, saw the SoftBank boss handing Neumann $4 billion. The Japanese conglomerate then went on to pump in another $14.5 billion.

However, in 2023 the bet backfired as WeWork declared bankruptcy, after a planned IPO went awry, followed by investor doubts about its governance, business model and profitability.

The episode affected Masayoshi Son, as he announced SoftBank would adopt a “defensive” position by being conservative when it came to the pace of new investments. Not only did the Japanese conglomerate witness an exodus of executives, but Son also ended up telling investors that he was “embarrassed and ashamed of himself for being so elated by big profits in the past.”

WeWork was not the only failed bet for SoftBank, as it also faced criticism for unsuccessful investments in dog-walking service Wag, robot pizza chain Zume and, most importantly, payments service Wirecard, which collapsed in 2020 after being named in Germany’s biggest post-war accounting fraud, where €1.9 billion in reported cash was found to be non-existent.

Around the same time, Greensill, a SoftBank-backed supply chain finance firm in the United Kingdom and Australia, also shut down amid illegal lobbying accusations.

The big gamble

Stargate is a huge bet for Son and the wider American tech sector, as through this, the world’s largest economy is looking to enhance its AI infrastructure to 10 gigawatts by 2029, with Texas, Michigan, New Mexico and Wisconsin being key data centre hubs.

However, economists and investors believe that the current AI infrastructure, far cheaper than Stargate, already fails to generate adequate revenue compared to its cost. Also, newer AI models will likely be more power-efficient, rendering massive data centres obsolete.

Data centres are also known for straining energy grids, leading to higher operational as well as environmental costs, undermining economic viability.

Masayoshi Son disagrees with the detractors, as he envisions 10 times more AI chips being deployed in each three-year cycle. Over time, these chips themselves will become 10 times more potent, while AI models, on their part, will ramp up productivity by a factor of 10.

“That’s 1,000x in three years. Nine years with three generations is 1,000,000,000x. It’s a huge, huge difference,” he told TIME.

Another concern of critics is that the collaboration between OpenAI, Oracle and SoftBank could result in a cartel that stifles innovation while inflating costs.

Taking a different view, Son remarked, “For the AI race, it requires hundreds of billions of dollars of investment into the data centres, buying chips, integrating chips and training the models. It’s very, very costly, so it will naturally be concentrated into several very capable companies in terms of talent and capitalisation.”

Stargate is also a prime example of geopolitical and technological rivalries finding a common link: Washington’s desire (spooked by DeepSeek’s rise) to beat Beijing in the so-called AI “arms race.” Korean-Japanese Son has picked his side here.

Or call it Son’s revenge, as Beijing’s regulatory crackdown on its tech industry in 2021 caused stocks to plummet, leading to a financial bloodbath for SoftBank.

He told TIME, “I have stopped investing in China. Zero. I’m now focused on investing in the US.”

However, he still has great admiration for Chinese business acumen, reflected in his words: “You cannot underestimate China’s crowd of young entrepreneurs, young scientists. They are for real.”

Talking about Stargate, out of the total $500 billion to be spent over four years, some $100 billion was to be invested “immediately,” to create 100,000 permanent jobs. However, only roughly $10 billion has so far been deployed in the Texas city of Abilene, where some 7,000 temporary construction jobs reportedly have been created, providing a mixed bag to the local economy in the form of growing job openings and a housing crisis.

Two elements from the dot-com era, fibre optic cable and 3G infrastructure, went on to prove invaluable over the years. However, the same can’t be said about data centres (warehouses packed with GPUs), as these infrastructures may not enjoy such longevity given the industry’s emphasis on developing next-generation AI that will be more energy-friendly.

Has Masayoshi Son, who has repeatedly risen like a phoenix after multiple investment failures, taken a big gamble about Stargate and American AI ambitions in general? Only time will tell.

The post Stargate: Masayoshi Son’s next big bet appeared first on International Finance.

While the Republican called the verdict a “disgrace” and decided to carry on the levies, named as “global tariffs,” through alternative means, the mechanism, since 2025, has created flutters around the world. Not only did the overall global trade flow get adversely affected, Uncle Sam’s relations with allies like Canada, the European Union, South Korea and India also faced significant headwinds.

Post the SC verdict, where are things heading now? To discuss this, International Finance caught up with Linda Middleton-Jones, an advocate and ambassador for international trade. As a founder and Managing Director of International Trade Matters with over 30 years of experience in international commerce, Linda serves as an Internationalisation Specialist for “Innovate UK,” supporting innovative tech startups in global market expansion.

Previously, as the International Trade Director for Plymouth Chamber of Commerce, she created the Manufacturing Barometer (mentioned at Davos and recorded in Hansard) and the Global Trade Blueprint based on Sensemaking principles. Named “Most Influential Businesswoman in Multi-Sector International Commerce 2022,” Linda completed certified training with MIT, The Economist and the ILM.

In this exclusive conversation, Linda discusses how the “Trump Tariffs” achieved limited success in fulfilling primary goals such as manufacturing reshoring, deficit reduction and revenue generation, while generating substantial costs for American businesses and consumers alike. She also notes that businesses dependent on imported components faced higher input costs, reducing competitiveness globally.

International Finance: What is your view on the clash between the US Supreme Court and the Donald Trump administration after tariffs continued despite the ruling?

Linda Middleton-Jones: The clash exemplifies political fragmentation overriding institutional governance—a tension familiar to companies navigating competing jurisdictions. When executive authority supersedes judicial oversight, it creates unpredictability for internationally trading businesses. From my work with UK exporters through International Trade Matters, this instability complicates strategic planning and risk assessment. Companies require regulatory certainty; when political expediency trumps constitutional frameworks, it undermines the governance pillar of ESG that businesses increasingly depend upon. This isn’t merely domestic politics—it reverberates through global supply chains, forcing trading partners to question America’s commitment to rules-based commerce. The real victims are SMEs lacking resources to pivot quickly when political whims override established frameworks.

Are tariffs the only way to address serious balance of payments deficits?

Tariffs represent the bluntest instrument in economic policy—effective perhaps for headline politics but crude for addressing structural imbalances. My experience with Innovate UK (United Kingdom’s national innovation agency) demonstrates alternative approaches: investing in innovation, enhancing productivity, supporting export capability, and improving competitiveness through skills development. Japan and Germany achieved trade surpluses through manufacturing excellence, not protectionism. Balance of payments deficits reflect deeper issues, currency valuations, consumption patterns, productivity gaps, and comparative advantages. Addressing these requires systemic change: infrastructure investment, education reform, and industrial strategy. Tariffs may temporarily reduce imports but simultaneously increase costs for domestic manufacturers dependent on global supply chains, potentially worsening competitiveness. Sustainable solutions lie in enhancing export capability, not simply restricting imports.

Have tariffs helped boost US manufacturing, trade balance, or federal revenue so far?

Evidence suggests limited success across all three metrics. Manufacturing reshoring proves slow and expensive—relocating complex supply chains requires years and substantial capital investment. The trade deficit with China decreased marginally but diverted rather than eliminated—imports shifted to Vietnam, Mexico, and other nations. Federal revenue from tariffs increased nominally but pales against broader economic costs: higher consumer prices, retaliatory tariffs damaging agricultural exports, and supply chain disruptions. Companies I work with report increased costs without corresponding domestic alternatives. The Peterson Institute estimates tariffs cost American households considerably more than the revenue generated. Manufacturing competitiveness requires workforce skills, infrastructure, and innovation investment—tariffs alone cannot substitute for a comprehensive industrial strategy. Short-term political gains versus long-term economic reality.

Do Trump’s tariffs contradict the principles of free trade?

Unequivocally, yes. Free trade principles rest on comparative advantage, specialisation, and mutual benefit through reduced barriers. Tariffs fundamentally contradict these tenets, representing protectionism regardless of justification. However, the nuanced reality acknowledges that ‘free trade’ rarely exists purely—every nation maintains strategic protections around agriculture, defence, and sensitive technologies. The question becomes whether tariffs address genuine unfair practices or simply protect uncompetitive industries. China’s state subsidies, intellectual property theft, and market access restrictions warrant a response, but blanket tariffs penalise allies and trading partners indiscriminately. WTO mechanisms exist precisely to adjudicate trade disputes through rules-based frameworks. Abandoning multilateral systems for unilateral action undermines decades of trade architecture, inviting retaliatory fragmentation that ultimately harms all participants.

Could the ruling affect the China+One supply chain strategy in the near term?

The ruling creates short-term uncertainty but is unlikely to derail China+One fundamentally. Companies pursuing supply chain diversification respond to multiple drivers beyond tariffs: geopolitical risk, pandemic lessons, intellectual property concerns, and ESG considerations regarding labour practices and critical minerals sourcing. My clients implementing China+One strategies—relocating to Vietnam, India, Mexico—cite resilience over cost optimisation. Even tariff removal wouldn’t reverse investments already committed. However, reduced tariff certainty may slow new diversification investments as companies await clarity. The strategic imperative remains: overconcentration in China presents unacceptable risk regardless of tariff policy. Geographic diversification reflects long-term risk management, not merely tariff avoidance. Political instability accelerates this trend rather than reverses it.

How have tariffs strained US ties with allies like Japan, South Korea, the UK, EU, and India?

Tariffs against allies fundamentally breach the trust underpinned by decades of partnership. Japan and South Korea, critical security partners facing China and North Korea, find themselves economically targeted alongside adversaries. The UK, seeking post-Brexit trade opportunities, encountered American protectionism rather than the promised partnership. EU relations deteriorated as tariffs on steel, aluminium, and other sectors contradicted stated alliance values. India’s retaliatory tariffs on American goods demonstrate damaged goodwill. Beyond economics, these actions signal unreliability—if America weaponises trade against allies during peacetime, what commitment remains during crises? My work shows British exporters questioning American market dependence, seeking alternative partnerships. Trust, once broken, requires years rebuilding. Allies increasingly pursue China relationships, CPTPP membership, and regional agreements excluding America, fundamentally realigning global trade architecture.

Will US allies now seek more concessions after the ruling?

Absolutely. The ruling demonstrates institutional limits on executive authority, emboldening allies to press for advantages. Japan, the EU, and others will demand tariff removals, market access improvements, and safeguards against future unilateral actions as preconditions for deeper cooperation. They recognise American political instability creates negotiating leverage—businesses and states demanding trade certainty pressure the federal government toward compromise. However, allies also pursue insurance policies: strengthening intra-regional trade, diversifying away from US dependence, and building alternative frameworks. The ruling proves America’s internal divisions, suggesting allies cannot rely upon a consistent policy. Consequently, concessions sought extend beyond immediate tariff relief toward structural guarantees and dispute resolution mechanisms limiting future executive overreach. Power dynamics have shifted—America’s allies recognise they hold cards previously underutilised.

Have these tariffs become counterproductive for the US economy?

Increasingly, evidence suggests yes. Initial objectives—manufacturing reshoring, deficit reduction, revenue generation—achieved limited success while generating substantial costs. American manufacturers dependent on imported components face higher input costs, reducing competitiveness globally. Agricultural exports collapsed under retaliatory tariffs, requiring federal bailouts exceeding tariff revenue. Consumer prices increased disproportionately, affecting lower-income households. Supply chain disruptions revealed during COVID-19 were exacerbated rather than resolved. Perhaps most damagingly, America’s reputation for rules-based trade governance suffered irreparable harm, encouraging allies toward alternative partnerships. My clients report that tariff unpredictability—more than tariffs themselves—proves most destructive, preventing long-term investment decisions. When political expediency overrides economic rationality, everyone loses. Protectionism may offer short-term political satisfaction but delivers long-term economic pain.

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“Takaichi may seek the BOJ’s help in keeping yen from falling in check, as the fact that Washington conducted rate checks to prop up the yen last month signals its preference for the currency to strengthen against the dollar,” Makoto Sakurai remarked.

“Currency intervention has only a temporary effect in combating yen-selling pressure. The best way to counter a weak yen is for the BOJ to raise interest rates. A renewed yen slide would push up inflation through higher import costs and offset some of the downward pressure from government fuel subsidies,” said Makoto Sakurai, who reportedly retains close contact with the central bank’s incumbent policymakers.

“If the need to combat sharp yen falls emerges, the BOJ can justify raising rates as soon as March by pointing to prospects of strong wage growth in annual spring wage talks between companies and unions. It would make better sense to wait until April, but depending on yen moves, there’s a chance the BOJ could raise rates in March,” the former board member added.

Sakurai served as a BOJ board member from 2016 to 2021, the timeframe that saw the central bank shift its policy focus away from huge asset purchases toward controlling long-term interest rates through the introduction of bond yield control.

He stated that the BOJ may need to raise its policy rate twice in both 2026 and 2027, increasing it from the current 0.75% to 1.75%. This rate will neither cool nor overheat the Japanese economy.

“Hiking rates at a faster pace could hurt Japan’s banking system by increasing bankruptcies among small firms and hurting the balance sheets of regional lenders,” Makoto Sakurai added.

The year 2024 saw a massive change in the BOJ’s policy approach, with the central bank ending a decade-long massive stimulus programme, apart from raising rates several times, including in December, when it took its short-term policy rate to a 30-year high of 0.75%.

With inflation exceeding the BOJ’s 2% target for nearly four years, Governor Kazuo Ueda has signalled the apex institution’s readiness to keep raising rates if its economic projections materialise. The BOJ’s next policy meeting will be held on March 18-19, followed by the board meeting on April 27-28, during which it will also make fresh quarterly growth and inflation forecasts.

A weak yen has become both an economic and political headache for Japanese policymakers, with the phenomenon hurting households and retailers by pushing up imported fuel and food costs. Since Takaichi’s ascendancy as the country’s Prime Minister in October 2025, the currency has fallen about 8% against the dollar to an 18-month low of 159.45 in January. In fact, according to reports published in The Mainichi daily, one of Japan’s major newspapers, Takaichi, during her meeting with BOJ Governor Ueda in February, expressed “reservations” about additional interest rate hikes.

While there hasn’t been any proper clarification from either of the two personalities, the report signals potential friction over monetary policy that could complicate the BOJ’s coordination efforts with the newly strengthened administration. While Ueda described the meeting as a “general exchange of views on economic and financial developments,” apart from refuting rumours of the PM making specific monetary policy requests, Takaichi said that she hoped the central bank would work closely with the government to durably achieve its 2% inflation target, accompanied by wage gains.

According to the BOJ governor, when he met Takaichi in November 2025, she was told that the central bank was gradually raising interest rates to guide inflation smoothly toward its 2% target and ensure the economy achieves sustainable growth.

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Speaking at the Saudi-Japanese Ministerial Investment Forum 2026, Khalid Al-Falih explained that this makes the Asian country the Kingdom’s third-largest trading partner. The Gulf major has also firmly established itself as a very important partner for Japan from the viewpoint of the latter’s energy security, having been a stable supplier of crude oil for many years. Tokyo, for its part, has remained committed to supporting the Kingdom’s “Vision 2030” diversification agenda by sharing its industrial knowledge and advanced technologies.

“This trade is dominated by the Kingdom’s exports of energy products, specifically oil, gas, and their derivatives. We certainly look forward to the Saudi private sector increasing trade with Japan, particularly in high-tech Japanese products. As for investment, Japanese investment in the Kingdom is good and strong, but we look forward to raising the level of Japanese investment in the Kingdom. Today, the Kingdom offers promising opportunities for Japanese companies in several fields, including the traditional sector that links the two economies: energy,” Al-Falih said.

The minister went on to identify areas, including green and blue hydrogen, advanced industries, health, food security, innovation and entrepreneurship, where both the nations can form new chapters of collaboration.

During his speech, Al-Falih shed light on how the Kingdom’s pavilion at “Expo 2025” in Osaka achieved remarkable success, with the exhibition receiving more than three million visitors, reflecting the Japanese public’s interest in Saudi Arabia.

“The pavilion also organised approximately 700 new business events, several each day, including 88 major investment events led by the Ministry of Investment. Today, as we prepare for the upcoming Expo 2030, we look forward to building upon Japan’s achievements,” he said.

The minister further noted, “During our visit to Japan, we agreed to establish a partnership to transfer the remarkable Japanese experience from Expo Osaka 2025 to Expo Riyadh 2030. I am certain that the Japanese pavilion at Expo Riyadh will rival the Saudi pavilion at Expo Osaka in terms of organisation, innovation, and visitor turnout.”

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“Despite the current yield level, which ⁠is high, ‌the auction outcome was not strong,” said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management, while interacting with Reuters.

“That is because the market ⁠is concerned that the Bank of Japan (BOJ) is behind the curve in dealing with the risk of inflation, and it will have to raise the rate higher,” he added.

The 10-year bond yields climbed to ⁠a near three-decade high in the previous session, leading to the January 6 auction, as markets braced for further interest rate hikes by the BOJ. The central bank raised ‍its policy rate to 0.75% from 0.5% in December 2025, but the yen has struggled to regain ground as markets expect the pace of the BOJ’s rate hikes to remain slow.

A weaker yen, while lifting import costs and fuelling inflation, also reinforces analyst expectations of further interest rate hikes.

“Markets now expect the BOJ’s terminal rate to rise to about 1.7%, based on forward one-year overnight index swaps (OIS) two years ahead, which are pricing in roughly 1.6956%,” Inadome said.

The OIS, a rate for swapping the overnight call rate and a fixed interest rate, provides an effective ⁠way to monitor market perceptions about the BOJ’s monetary ‌policy.

“Yields on longer-dated bonds also rose, with the 20-year JGB yield edging up 1.5 bps to 3.06%. The 30-year JGB yield rose 2 bps ‌to 3.475%. The ⁠two-year JGB yield inched down 0.5 bp to 1.185%. The five-year yield was flat ⁠at 1.595%,” Reuters concluded.

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Wayve, which received funding from SoftBank Group and Nvidia, opened a testing and development centre in Japan a few months back. Nissan, which launched its ProPilot system in 2016 and rolled out a second-generation version in 2019 to assist with highway driving, has not yet announced which models will come equipped with the next-generation driver-assistance system. However, Wayve is playing a crucial role in developing the Japanese automaker’s upcoming driver-assistance system.

Meet The New Player

The British start-up has quickly become one of the best-funded companies in the UK, while also gaining recognition as one of the few artificial intelligence pioneers based in the country. According to Alex Kendall, the founder of Wayve, who spoke with The Guardian, in addition to Nissan, the company is working with large manufacturers in Europe, North America, and Japan.

In fact, chip giant Nvidia recently signed a letter of intent for a possible USD 500 million investment in Wayve’s next funding round. The start-up has already raised USD 1.3 billion from investors, including Japan’s SoftBank, to fund its expansion in the United States, Germany, Israel, and Japan, as well as in London.

Nvidia is already providing one or two chips in each car using Wayve technology, and many more in the data centres used to train Wayve’s foundation model on vast amounts of driving data, including videos of drivers encountering real-world models.

Kendall founded Wayve in 2017 after studying deep learning for computer vision and robotics at the University of Cambridge. He told The Guardian, “We want to build a trillion-dollar company,” while adding that the company had reached “a real inflection point in the capabilities of this technology” that allowed it to learn rapidly how to navigate Tokyo’s crowded streets.

Wayve uses AI models that learn how to drive by ingesting huge amounts of video and driving data, while spotting patterns it can then replicate. This approach contrasts with some other driverless technology companies, which tried to program explicit rules into their systems. Nissan was already developing its own autonomous driving technology, including in London trials, but the opportunity to use Wayve’s expertise led to the breakthrough the British start-up needed.

Robotaxis controlled by rival software are already operating in some American and Chinese cities, although companies have faced problems with cars occasionally being unable to navigate unusual obstacles.

Wayve cars use a combination of cameras and radar, similar to the Nissan cars, which also employ a more expensive lidar laser sensor. Kendall said this would provide “a level of redundancy” in an affordable manner.

A Unique Technology

The company, which has a distinguished list of investors such as Microsoft, SoftBank, Uber, Virgin Group, Nvidia, and Eclipse, has based its driver-assistance system on the “AV2.0 Approach,” which is pioneering the start-up’s end-to-end AI Driving Model. This replaces the modular “sense-plan-act” architecture of the traditional AV1.0 approach with a single neural network trained on diverse data to convert raw sensor inputs into safe driving outputs.

The technology learns driving skills from raw, unlabelled data using self-supervised learning, thereby eliminating the need to curate expensive and time-consuming labelled datasets. Additionally, AV2.0 doesn’t rely on HD maps, which enables seamless expansion to new geographies through data-driven adaptations. AV2.0 allows Wayve to think differently about sensors.

This data-first approach is flexible in terms of sensor selection, giving OEMs (original equipment manufacturers) the freedom to choose hardware based on their needs. AV2.0 can adapt to operate on any type of vehicle, from passenger cars to delivery vans. Advances made in either vehicle type directly benefit the other.

AV2.0 has introduced a rapid, continuous, and seamless fleet-learning loop: recording data, training models, evaluating performance, and deploying updated models. The “Fleet Learning Loop” efficiently gathers real-world driving data from diverse fleets, processes it in a cloud-based training infrastructure, and converts it into refined driving capabilities.

The mechanism has been optimally designed to support the transition from “eyes-on” driving functions to “eyes-off” as driving data exposure builds verifiably robust automated driving capabilities.

Following the philosophy of “Responsible Model Development,” AV2.0 implements MLOps workflows for responsible model development, utilising innovative tools, processes, and pipelines to build, train, and deploy foundation models. Before “On-Road Trials,” the start-up rigorously tests its AI driving models across a vast array of simulated driving scenarios for rapid and comprehensive evaluation.

Under the “Safety 2.0 Framework,” Wayve has introduced a revolutionary approach that addresses safety through the lens of deep world understanding. Unlike traditional methods, “Safety 2.0” acknowledges that true safety comes from an AI that, like a human driver, interprets the driving environment naturally. The result has been the creation of an AI system that inherently comprehends the intricacies of the world and drives behaviours for safe navigation.

Utilising Generative AI, Wayve has developed a high-fidelity, predictive world model that understands the implications of the vehicle’s actions and ensures safe responses to other road users. The model’s understanding can be used to prevent unsafe actions. Wayve’s end-to-end (e2e) model architecture and active learning processes have been optimised to produce effective, fluent, and safe driving behaviours from unlabelled driving videos, showcasing strong generalisation across various geographies, vehicles, and sensors. The entire model can be further enhanced with multimodal data sources that provide additional information.

New methods have been created for dataset introspection and control, while harnessing the emergent concepts generated by the AI and transforming them into a framework for deeper analysis. Safety 2.0 also carries comprehensive datasets for diverse driving scenarios and filters out low-quality and risky scenarios.

The model also has its own introspection method, where it uses natural language and other information to evaluate the AI’s decision-making process. OEMs also get control and visibility over their data assets and learning processes to ensure that Wayve’s AI models achieve the highest safety standards.

Advanced AI Making Driving Safe

Wayve’s “AI Driver” is transforming driving automation for foreign carmakers. The start-up’s mapless, hardware-agnostic solution enables efficient software upgrades, unlocking advanced levels of automation from L2+ to L4 as Wayve’s core AI model evolves. The approach resonates with automakers’ goals of ensuring innovation, safety, adaptability, and scalability when fielding driver-assistance systems.

The platform is designed for universal compatibility, allowing straightforward integration into any vehicle. This empowers OEMs to easily adopt automated features across their entire vehicle portfolio, promoting a cohesive driving experience across the lineup.

The unique mapless AI solution also facilitates effortless adaptation to any environment, eliminating the need for detailed high-definition maps. This simplifies global deployment and lowers costs in the process, allowing for scalable expansion of automated driving technology. Wayve’s “AI Driver” has also been future-proofed by enabling seamless over-the-air updates to support different levels of driving automation.

The “AI Driver” offers a comprehensive suite that includes foundational driving models, safety mechanisms, APIs, data collection, and cloud-based monitoring and configuration infrastructure. This platform is engineered to optimise performance, configuration, and safety, meeting the high standards of the automotive industry, including hands-free driver assistance day or night, from city to highway, with minimal hardware requirements. The entire package of comprehensive warning and active safety systems has been made global NCAP (New Car Assessment Programme)-compliant.

To scale globally, Wayve has set very tough qualification parameters for its AI Driver: it must perform in places it’s never seen before, with no region-specific retraining and no HD maps. The start-up has launched the “AI-500 Roadshow,” a bold plan to take its single foundation model to 500 cities by the end of 2025.

Image Credits: Wayve

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International Finance unpacks how Taiwan emerged as a chipmaking powerhouse, the US bid to reclaim manufacturing, and how Washington’s export bans and China’s countermoves are reshaping the global economy. Along the way, we bring insights from industry leaders and policy experts on the economic fallout and the future of the silicon struggle.

Global semiconductor supply

Just 100 miles from China’s coast, Taiwan’s TSMC (Taiwan Semiconductor Manufacturing Co.) produces roughly 90% of the world’s most advanced semiconductors. These chips power everything from Apple iPhones and Nvidia AI accelerators to critical infrastructure and defence systems.

Taiwan’s dominance, especially at the smallest transistor sizes, makes it the linchpin of the global tech supply chain: a phenomenon sometimes called the “silicon shield.” The logic is simple. Taiwan’s role in chip supply makes military conflict an economic catastrophe for everyone involved, acting as a deterrent to aggression.

TSMC’s ascent was decades in the making. Founded in 1987 with state support, TSMC pioneered the “pure-play” foundry model, producing chips designed by others and steadily outpacing global rivals.

Today, its technical know-how lets it pack billions of transistors onto fingernail-sized chips, years ahead of competitors. Until recently, nearly all these leading-edge chips were made in Taiwan, a concentration that inspires both awe and anxiety.

On one hand, TSMC is an economic and strategic bulwark for Taiwan, seen as a “sacred mountain protecting the country.” On the other hand, it creates a single point of failure: a natural disaster or geopolitical event could disrupt the world’s chip supply, with devastating consequences.

Policymakers worry about what will happen to TSMC’s “fabs” if China ever attacks or blocks Taiwan. The stakes are enormous: advanced chips are critical for civilian technology and national defence.

Even within Taiwan, there’s anxiety over how much chip technology should be shared abroad. Morris Chang, TSMC’s 91-year-old founder, has called out the dilemma, “The US Commerce Secretary said repeatedly that Taiwan is a very dangerous place [and] America cannot rely on Taiwan for chips… that, of course, is Taiwan’s dilemma.”

While TSMC is expanding overseas, Chang notes that “in the chip sector, globalisation is dead. Free trade is not quite that dead, but it’s in danger.” His warning is that higher costs and less ubiquity for advanced chips will result if the world splits into competing tech blocs.

Taiwan’s role as a global chip linchpin brings leverage and vulnerability, a reality now pushing others to develop their own advanced chipmaking muscle.

‘Make it in America’ chip push

The United States once led the world in chip design and manufacturing. As production shifted to Asia, America’s share of global chip fabrication capacity fell from 37% in 1990 to just 12% by 2020.

Former Commerce Secretary Gina Raimondo summed up the American predicament by saying that America had “dropped the ball,” allowing Asian rivals to surge ahead. Now, after pandemic-driven supply chain shocks, Washington is determined to “onshore” and “reshore” semiconductor production. But is it working?

A flurry of policies followed, from tariffs and trade pressure to hefty investment incentives. President Donald Trump threatened tariffs to push TSMC and others into building US plants. As a result, TSMC agreed to a $12 billion fab in Arizona, later expanding to a $40 billion project, which marked their first advanced facilities outside Taiwan. These fabs, when fully operational, will produce 4nm and 3nm chips, still trailing Taiwan’s 2nm technology but among the world’s most advanced.

President Joe Biden followed with the CHIPS and Science Act, a $52 billion package of subsidies, grants, and tax credits designed to “supercharge” US semiconductor manufacturing. This resulted in big investments from both American and foreign firms.

TSMC secured $6.6 billion in US grants for its Arizona plants, Samsung got $6 billion for a new Texas plant, and Micron announced a $100 billion New York megafab. The irony? Onshoring incentives are also benefiting foreign giants, whose rise was built on decades of government support in Asia.

Building a robust domestic chip industry is proving complex. Chip fabs are among the world’s most sophisticated factories, requiring immense precision and years to build. TSMC and Samsung have faced delays, cost overruns, and skilled labour shortages in the US.

Arizona’s TSMC site even had to “import” technicians from Taiwan, causing friction with US labour unions. Making advanced chips takes armies of PhD-level engineers, yet US immigration policies restrict high-skilled talent.

Analyst Marc Einstein notes, “You can’t just magic PhDs out of nowhere.”

Many experts argue that expanding high-skilled visa programmes is essential for the US chip renaissance.

Chip manufacturing is a global ecosystem. An advanced chip may be designed in California and fabricated in Taiwan using equipment from the Netherlands and materials from Japan and Germany.

“No single country can do everything,” says TSMC Arizona president Rosemary Castanares.

Even US fabs rely on $150 million ASML lithography machines from Europe. For now, US-based fabs remain smaller and a technological step behind Asia’s mega-fabs.

Historian Chris Miller calls TSMC’s Arizona plants “a generation behind the cutting edge in Taiwan,” and much lower in output.

TSMC itself is clear: its most advanced chips, and bleeding-edge R&D, will stay in Taiwan. Arizona’s fabs get slightly older, though still advanced tech.

The US officials might tout reshoring wins, but the centre of gravity remains in Asia. Restoring US chip leadership is a long-term effort, needing not just money and factories but also investment in education, workforce training, and immigration reform.

US-China crossfire in semiconductors

As Washington tried to onshore chipmaking, it also wielded trade weapons to slow China’s technological rise. The US-China trade war, which started with tariffs in 2018, has increasingly focused on semiconductors as a strategic chokepoint. The Trump and Biden administrations have sought to deny China advanced chips and manufacturing equipment to “protect national security.”

A pivotal moment occurred in October 2022 when Washington enacted stringent export controls. These regulations prevent global companies from selling high-performance chips or chip equipment that utilises US technology to China without obtaining a difficult-to-secure license.

If a chip was made with US software or machinery, as almost all advanced chips are, exporting it to China is restricted. The rules even bar US citizens from working for certain Chinese firms, choking off a “key pipeline of American talent.”

American officials argue this is essential to prevent “sensitive technologies” from fuelling China’s military modernisation, since advanced chips are dual-use, meaning they power both civilian and military AI.

Beijing calls this “technology terrorism” and has filed complaints at the World Trade Organisation, accusing Washington of abusing export controls. Chinese officials warn that these moves destabilise global supply chains. The impact is very much real. Huawei’s handset business collapsed after US sanctions cut it off from advanced chips.

Other Chinese firms, like memory giant YMTC, have been blacklisted. Even the United Kingdom-based ARM won’t license its latest designs to Chinese customers. Washington’s allies in the Netherlands and Japan have joined in, restricting exports of crucial lithography and chip equipment to China.

China’s initial response was cautious, but it has since weaponised its own dominance in key minerals. In 2023, Beijing restricted exports of gallium and germanium, both vital for chipmaking, and later banned exports of more minerals to the US.

These tit-for-tat moves signal China’s willingness to hit back with strategic materials. China also imposed its own limited bans, such as restricting US firm Micron’s chips from critical Chinese infrastructure.

At home, China has doubled down on self-reliance, pouring tens of billions into its chip sector through national funds and the “Made in China 2025” campaign.

President Xi Jinping calls on China to excel in key core technologies to ensure domestic innovation, thus preventing the country from being hindered by foreign sanctions.

The trade war has forced Chinese firms to seek new markets and supply chain arrangements, but often with slimmer profits.

Meanwhile, allied equipment makers like ASML now face the loss of lucrative Chinese customers, which raises concerns about lost innovation and revenue.

Nvidia CEO Jensen Huang recently blasted US export controls as “backfiring.”

He notes that Nvidia’s share of China’s AI chip market fell from 95% to 50%, with Chinese firms ramping up in-house alternatives. The bans, he says, “have pushed Chinese companies toward home-grown alternatives, spurring Chinese investment.”

Bill Gates similarly says US pressure has forced China to “go full speed ahead” on its own chips.

While some US officials argue these bans buy the West a crucial lead time in military AI, critics warn the strategy may accelerate China’s self-sufficiency and ultimately weaken the American industry.

The Chinese playbook

China has responded to the chip war with a multipronged strategy. At the core: building a self-sufficient semiconductor ecosystem. State-backed funds and national strategies aim to reduce dependence on foreign tech, especially in critical areas like manufacturing equipment and chip design.

Chinese firms have aggressively recruited global talent, including Taiwanese and American engineers, and have sometimes resorted to industrial espionage. The urgency to innovate has only intensified after US sanctions nearly crippled companies like ZTE and Huawei.

One breakthrough occurred in 2023 when Chinese chipmaker SMIC produced a 7nm chip, used in Huawei’s Mate 60 Pro, despite lacking access to the world’s most advanced lithography equipment.

US experts suspect SMIC adapted older machines with multiple patterning to achieve the feat. The phone’s teardown revealed memory chips from South Korea’s SK Hynix, showing that China can still source key components through unofficial channels or stockpiles.

While 7nm lags behind Apple’s 3nm chips, the achievement signals that China can adapt around sanctions, even though it comes at a high cost. Chinese companies are also developing workarounds, like using open-source chip architectures (RISC-V) and clustering less advanced chips to achieve AI tasks. Diplomatic efforts target partnerships with countries like Russia and some in Southeast Asia.

In parallel, China is building its own software and tooling ecosystem to reduce reliance on US and allied IP.

Still, China faces several pitfalls, including corruption in its state funds, persistent dependence on imported materials, and the technological gap in ultra-advanced manufacturing.

Globally, the chip war is creating a bifurcated tech order. There is a US-led bloc with strict controls and the most advanced chips, while a China-centric sphere relies on indigenous innovation and sometimes older technology.

Countries such as those in Europe, India, and Japan are now pursuing domestic manufacturing as a strategic objective. The aim is to avoid dependency on a single foreign supplier.

The global economy

The US-China semiconductor standoff has global ramifications. Allies, from Europe to Japan and India, are launching their own chip initiatives to bolster supply chain resilience. The European Union’s Chips Act aims to double Europe’s production share by 2030.

Japan is subsidising TSMC’s new Kumamoto plant; India, pitching its low-cost labour and market scale, is working to attract chipmakers despite obstacles like land acquisition and water supply. All these moves indicate a shift since countries want to reduce overreliance on any one supplier.

The balancing act is delicate for Asia’s chip powerhouses such as Taiwan, South Korea, and Japan. While they are US security partners, they rely heavily on China for a significant portion of their chip exports. With extensive operations in China, Korean giants Samsung and SK Hynix have even required waivers from US regulations.

TSMC, while benefiting from the US “friendshoring,” is careful not to sever links with Chinese customers. Diversification, by building plants in the United States and Japan, hedges bets against both geopolitics and American pressure.

A major unintended consequence is tech ecosystem fragmentation. If the world splits into separate tech stacks, innovation could slow (due to duplication and lost scale), but could also spark alternative breakthroughs. If denied access to leading-edge chips, the Chinese firms might focus on alternative architectures or software innovations.

The US and its allies, wary of supply chain risk, are building redundancy at a higher cost. A Boston Consulting Group study estimates that a full US-China semiconductor split could cost US companies $80 billion in lost revenues and $20 billion less R&D annually. Despite these costs, there is hope that competition will spur next-generation innovation, including quantum chips, new materials, and more resilient supply chains.

Governments everywhere are pouring money into chip R&D, education, and mature-node production for critical industries like autos and defence. Recent chip shortages made clear that even older chips are vital.

AI is front and centre in this fight. US restrictions aim to hold back China’s AI progress by limiting access to the most powerful GPUs. In the short term, it’s working, as Chinese companies are scrambling to adapt.

But software-side innovation and hardware workarounds are likely. If anything, scarcity may force efficiency and new approaches to AI development. In the long run, stifling hardware access may backfire by spurring domestic breakthroughs in China and elsewhere.

The chip war also raises fundamental questions about economic sovereignty. Governments now ask whether they can count on secure chip supplies in a crisis.

For many, the answer is “not yet,” driving a rush to build national capacity and regional redundancy, even if it means higher costs. Taiwan’s “silicon shield” still matters, but if TSMC globalises, no one country will wield absolute leverage for long.

Looking ahead, an “armed détente” is possible: both superpowers invest in reducing their vulnerabilities, and a new equilibrium emerges. North America might reach 20% of global chip output by 2030; China could attain partial self-sufficiency in 7nm or 5nm nodes. The world could then operate dual tech systems, trade some chips while restricting others for security reasons.

A total rupture, such as war over Taiwan, remains a nightmare. Disruption to Taiwan’s fabs would cripple the global electronics industry.

So far, fear of mutual destruction has preserved the status quo. As the US and others reduce reliance on Taiwan, that deterrence may weaken over time.

The world is realising, sometimes painfully, how critical and fragile the semiconductor supply chain is. Chips have become the new oil, with control over them reshaping the global balance of power in the 21st century.

Silicon geopolitics is here to stay, and every country will feel its impact.

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