SoftBank purchased Intel shares at $23 each for a stake of just under 2%.
Intel posted its first annual loss since 1986, totaling $18.8 billion.
US government is reportedly considering taking up to a 10% stake in Intel.
SoftBank Group of Japan has made a $2 billion equity investment in Intel. This comes at a time when the US chipmaker was struggling to keep operations running while attempting to turn things around under increasing pressure. The deal, announced on Monday, will make SoftBank one of Intel’s top ten shareholders and reflects the Japanese investor’s growing interest in artificial intelligence.
SurveyThe investment comes at a critical time for Intel, which reported its first annual loss since 1986, totalling $18.8 billion. Intel, once the dominant player in the semiconductor industry, has been losing ground to rivals such as AMD in the PC and server chip markets, while its contract manufacturing business has failed to attract the scale of clients that Taiwan’s TSMC does.
According to Reuters, SoftBank will pay $23 per Intel share, which is slightly less than Monday’s closing price of $23.66, for an equity stake of just under 2%. Despite its modest size, this move places SoftBank as Intel’s sixth largest investor, according to LSEG. According to a person familiar with the matter, the Japanese conglomerate will not seek a seat on the board or commit to purchasing Intel chips.
SoftBank CEO Masayoshi Son stated that the investment demonstrates Intel’s commitment to expanding US semiconductor manufacturing capacity. SoftBank’s broader AI strategy includes the $500 billion Stargate data centre project and a $30 billion investment in OpenAI made earlier this year.
Furthermore, the government is closely monitoring Intel’s comeback efforts. According to Bloomberg, the US government is considering buying up to a 10% stake in Intel following talks between President Donald Trump and CEO Lip-Bu Tan. However, there were mixed reactions, with Intel shares rising 5.6% in after-market trading and SoftBank’s stock falling more than 5% in Tokyo.
Analysts believe Intel’s unique position as a chip designer and manufacturer could still help it mount a credible challenge to TSMC in the United States, assuming it can carry out its long-delayed strategy.
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Ashish Singh
Ashish Singh is the Chief Copy Editor at Digit. He's been wrangling tech jargon since 2020 (Times Internet, Jagran English '22). When not policing commas, he's likely fueling his gadget habit with coffee, strategising his next virtual race, or plotting a road trip to test the latest in-car tech. He speaks fluent Geek. View Full Profile
