SoftBank to take $2B stake in beleaguered chipmaker Intel – News

SoftBank Group Corp. will make a $2 billion investment in Intel Corp., providing a boost to the embattled chipmaker amid ongoing discussions about a government intervention.

Under the terms of the deal, SoftBank will buy $2 billion worth of Intel’s stock at $23 per share, representing a slight discount on the company’s Monday closing stock price of $23.66. That will give SoftBank around 87 million shares in the company, amounting to a 2% stake overall. As such, the Japanese firm will become Intel’s sixth largest shareholder.

Investors signaled their approval, as Intel’s stock gained more than 4% on the news in after-hours trading, having fallen 3.7% during regular trading.

The deal comes as officials in U.S. President Donald Trump’s administration continue discussions over a plan that could see the government take a 10% stake in the company, as part of an effort to try and revive its fortunes and boost the country’s domestic chip manufacturing industry.

The additional investment from SoftBank will be helpful for Intel, but it still faces a struggle to acquire customers for its chip design and fabrication businesses and get them back on track. During its most recent financial report, Intel reported a net loss of $2.9 billion in the second quarter of fiscal 2025. At the time, the chipmaker said it was seeking larger commitments from customers in order to justify its plans to manufacture the latest generation of its artificial intelligence processors.

SoftBank had promised in December to invest up to $100 billion in U.S. companies over the next four years, in a move that was seen by analysts as an attempt to build goodwill with Trump.

As for the U.S. government’s proposed 10% stake in Intel, the structure and terms of such an agreement have not yet been worked out, but Bloomberg reported today that one possible option is to convert some of the money that was earmarked for the company as part of the 2022 Chips and Science Act into an equity stake.

That arrangement is thought to have been proposed by Commerce Secretary Howard Lutnick, who is keen for the U.S. to get a better return on investment on the companies it has funded via the act.

Under previous President Joe Biden’s administration, Intel emerged as the biggest beneficiary of the Chips Act. The government announced it would receive almost $8 billion in grants for building new and expanded chip fabrication plants in Ohio and other parts of the U.S. The money was set to be paid after the chipmaker met specified milestones, but Lutnick wants to change the terms and convert those funds into an equity stake in the company.

Talks between Intel and the White House intensified just days after Trump posted a demand for Chief Executive Lip-Bu Tan to resign, citing a conflict of interest regarding his investments in Chinese chipmakers. Last week, Tan paid a visit to Trump at the White House to resolve the matter, and it’s there that the idea of a government investment was first mooted.

It’s thought that White House officials were upset by Tan’s announcement earlier this year that he will slow down the construction of its Ohio-based plant.

The exact value of the government’s proposed 10% stake in Intel has not yet been determined, but the company has a market capitalization of about $10 billion. If the government does proceed with the plan, it would become one of Intel’s largest shareholders.

As with the Biden administration, Trump has made domestic semiconductor manufacturing a priority, and his officials believe that Intel is the only viable contender to Taiwan Semiconductor Manufacturing Co., which dominates the chipmaking industry. Intel’s advantage stems from the fact it both designs and manufactures chips, although analysts from theCUBE Research have repeatedly called on the company to spin out its foundry business as part of a bold plan to secure the country’s leadership in advanced semiconductor manufacturing.

Trump has made repeated interventions in the U.S. chipmaking industry. Earlier this year, he introduced new restrictions on the types of advanced AI chips that could be exported to China, before repealing those sanctions in return for Nvidia Corp. and Advanced Micro Devices Inc. handing over 15% of their revenue from sales in the country.

In addition, Trump helped to orchestrate the Stargate Project, which will see SoftBank, OpenAI, Oracle Corp. and others invest up to $500 billion in AI data centers in the U.S. over the next five years.

Image: News/Microsoft Designer