SoftBank Group is investing $2 billion in Intel as a significant vote of confidence for the struggling American chipmaker in the midst of a turnaround.
The once-iconic U.S. company, which has failed to compete after years of management errors that left it with virtually no presence in the expanding artificial intelligence chip market, is getting a lifeline from the equity investment, which the companies disclosed on Monday.
The $500 billion Stargate U.S. datacenter project is part of the Japanese tech investor’s big bet on semiconductor and AI assets, and it will make SoftBank a top-10 shareholder in Intel.
SoftBank also discussed purchasing Intel’s contract chipmaking division prior to the investment announcement on Tuesday.
After spending billions of dollars to establish a contract manufacturing company, Intel has found it difficult to compete with Taiwan’s TSMC and has hardly drawn in outside clients.
“SoftBank’s investment is helpful, but it is not going to change Intel’s situation,” stated Amir Anvarzadeh, Asymmetric Advisors’ Japan equity strategist.
He remarked, “It’s more to maintain this very good relationship he has with Trump,” alluding to Masayoshi Son, the CEO of SoftBank.
The agreement comes amid media rumors last week that the U.S. government may purchase an Intel interest following a meeting between President Donald Trump and new CEO Lip-Bu Tan, which was prompted by the President’s demand that Tan leave due to his connections to Chinese companies.
As part of a trade agreement with Washington last month, Tokyo also promised to invest $550 billion in the United States.
Intel investment is not currently included in that package.
SoftBank’s choice to invest in Intel has nothing to do with Trump.
“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,” Son stated in a press release.
It will pay $23, which is a little less than the closing price of $23.66 on Monday, for each Intel share.
SoftBank’s investment will be made through Intel’s primary issuance of common stock, which represents about 2% of the equity position based on the U.S. company’s market capitalization at Monday’s close of trading, according to an Intel representative.
Based on LSEG data, the Japanese corporation would rise to become the sixth-largest Intel investor.
Intel jumped 6.6% in U.S. premarket trade on Tuesday, while SoftBank’s shares ended the day down 4%.
The Japanese corporation will only purchase stock in Intel and will not run for a board position or commit to purchasing Intel’s chips.
MANY DIFFICULTIES
Due to a number of issues, Intel has experienced financial difficulties and in 2024 reported an annual loss of $18.8 billion, the first since 1986.
While its ambitious and expensive strategy for a chip contracting business has failed to take off, Intel’s longstanding rival AMD has been gaining market share in the semiconductor markets for its staple personal computers and servers.
In a potentially costly departure from its prior tactics, the corporation is now thinking of making a big change to its contract chip manufacturing business in an attempt to attract big clients.
SoftBank’s Son has been in discussions with Tan on a possible deal ever since Tan was appointed CEO of Intel in March.
They talked about a variety of possibilities, such as minority investments like the one announced on Monday or joint ventures with outside parties.
The $2 billion investment did not rule out a larger future purchase, including Intel’s foundry company.
According to Charu Chanana, chief investment strategist at Saxo, “Intel’s dual role as designer and manufacturer/fabricator uniquely positions it as possibly the best platform in the U.S. to compete with TSMC.”
The U.S. government is in negotiations to acquire a 10% share in Intel. Tan, a veteran of the chip industry who also held a SoftBank board position prior to his departure in 2022, expressed gratitude to Son for “the confidence he has placed in Intel with this investment.”
The cash from Intel is the most recent in a series of massive investment announcements made by the Japanese business in 2025, including leading the financing for Stargate and investing $30 billion in ChatGPT maker OpenAI.
