Intel is getting a $2 billion capital injection from SoftBank Group in a major boost of confidence for the troubled U.S. chipmaker that is in the middle of a turnaround effort.
The equity investment, announced by the two companies on Monday, is a lifeline for the once-iconic U.S. chipmaker which has struggled to compete after years of management blunders that left it with virtually no foothold in the booming artificial intelligence chip industry.
The deal follows media reports last week that the U.S. government may buy a stake in Intel, after a meeting between new CEO Lip-Bu Tan and President Donald Trump that was sparked by the President’s demand for Tan’s resignation over his ties to Chinese firms.
The investment will make SoftBank a top-10 shareholder of Intel and add to the Japanese tech investor’s ambitious bet on AI that includes the $500 billion Stargate U.S. data center project.
“This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role,” SoftBank CEO Masayoshi Son said in a statement.
It will pay $23 per share for the Intel common stock. SoftBank would become the sixth largest investor in Intel, according to LSEG data.
SoftBank’s investment will come via a primary issuance of common stock by Intel, and, based on the U.S. company’s market capitalisation at close of trading on Monday, represent an equity stake of just under 2%, an Intel spokesperson said.
SoftBank’s shares dropped more than 5% on Tuesday following the announcement, while Intel surged 5.6% in after-market hours trading.
The Japanese company will only take an equity stake in Intel and will neither seek a board seat nor commit to buying Intel’s chips, the person familiar with the matter said.
Intel has struggled financially and recorded an annual loss of $18.8 billion in 2024, its first such loss since 1986. The Intel funding is the latest in the Japanese company’s run of mammoth investment announcements in 2025, which include committing $30 billion to ChatGPT maker OpenAI as well as leading the financing for Stargate.
Source: Globalbankingandfinance