Japanese tech giant SoftBank has made a significant $2 billion investment in US-based chip giant Intel. This investment is a vote of confidence and a lifeline for Intel, which has long struggled with management errors and has been lagging in the AI chip market.
SoftBank Gives Intel a Lifeline
SoftBank’s investment is through Intel’s shares, making the Japanese company one of Intel’s top 10 shareholders. Upon completion, SoftBank will own approximately 2 percent of Intel’s shares, making it the company’s sixth-largest investor.
However, SoftBank is not seeking a board seat or making any commitments regarding chip purchases. SoftBank CEO Masayoshi Son stated that this investment reflects SoftBank’s belief in advanced semiconductor manufacturing and supply chain development in the US.
This strategic move also reinforces SoftBank’s major investments in AI, such as the $500 billion Stargate data center project in the US. Following the investment announcement, SoftBank shares fell more than 5 percent, while Intel’s gained 5.6 percent after the market closed.
Intel reported a record $18.8 billion loss in 2024, its first annual loss since 1986. The company is grappling with the rise of rivals like AMD in the PC and server chip markets and the failure of its contract chip manufacturing plans to compete with TSMC.
Furthermore, missing out on the artificial intelligence revolution pioneered by Nvidia is one of its biggest challenges. According to a Reuters report, Intel is planning significant changes to its contract chip manufacturing model to win over major customers.
Moreover, being both a designer and a manufacturer makes Intel the strongest candidate to compete with TSMC in the US, making it a strategically critical company for the US. Bloomberg previously claimed that the US government was also in talks to acquire a 10 percent stake in Intel, but this claim has not been confirmed by either party.
