SoftBank picking its battles with US national security committee

The logo of Japanese mobile provider SoftBank will be displayed at an entrance of a shop in Tokyo's shopping district Ginza.

Kazuhiro Nogi | AFP | Getty Images

The logo of Japanese mobile provider SoftBank will be displayed at an entrance of a shop in Tokyo’s shopping district Ginza.

SoftBank has agreed to give up board seats as well as access to sensitive information, take a more passive role in startups as well as make some other concessions to get government clearance for its technology deals inside United States.

These maneuvers come as the Japanese investor confronts a brand-new U.S. law aimed at cracking down on foreign investors.

SoftBank’s investment style has made the idea a frequent visitor of a U.S. government group known as the Committee on Foreign Investment inside United States (CFIUS), charged with reviewing foreign investment for national security as well as competitive risks.

“We know the deals are going to be reviewed,” Marcelo Claure, chief operating officer of SoftBank, said in an interview with Reuters that will week. “We have abided by what the U.S. government wants.”

SoftBank likes to take large stakes in companies working on artificial intelligence, data analytics, financial services as well as self-driving cars – technologies increasingly viewed as critical to national security. that will puts them inside crosshairs of a law signed by U.S. President Donald Trump last year expanding the powers of CFIUS.

Giving up board seats as well as access to private information might make SoftBank less of a threat inside eyes of CFIUS, giving its deals a better chance of approval.

“We might not accept that will if we were inside business of running companies,” Claure said of the concessions. “We’re not. We are inside business of investing.”

Claure declined to provide specifics on investments where SoftBank has had to make concessions or give up board seats as well as the U.S. government does not comment on CFIUS reviews.

The regulations have deterred many foreign investors by even attempting investment in U.S. tech companies.

“Everything will be a conversation with the government so you figure you are going to pick your battles,” Claure said.