Intel gets $2B lifeline in form of SoftBank equity investment

Intel will receive a $2 billion capital injection from Japanese technology giant SoftBank Group, marking a major show of confidence in the struggling U.S. chipmaker as it works through a major turnaround.

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.

It will make SoftBank a top-10 shareholder of Intel and add to the Japanese tech investor's ambitious bet on artificial intelligence that includes the $500 billion Stargate U.S. data center project.

"SoftBank's investment helps, but it is not what is going to move the dial for Intel," said Amir Anvarzadeh, Japan equity strategist at Asymmetric Advisors.

"It's more to maintain this very good relationship he has with Trump," he said, referring to SoftBank CEO Masayoshi Son.

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 after the latter called for the chief executive to resign over his ties to Chinese firms.

But after meeting with him, Trump relented, saying Tan had an "amazing story."

It also comes as Tokyo pledged a $550 billion investment package into the U.S. last month as part of a trade deal with Washington.

The Intel investment is not currently part of that package, a Japanese government source with knowledge of the negotiations said.

SoftBank's decision to invest in Intel is not connected to Trump, a person familiar with the matter told Reuters.

"Semiconductors are the foundation of every industry," Son said in a statement. "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 will pay $23 per Intel share, a slight discount to Monday's closing price of $23.66.

The investment will come via a primary issuance of common stock by Intel, and, based on the U.S. company's market capitalization at close of trading on Monday, represent an equity stake of just under 2%, an Intel spokesperson said.

The Japanese company would become the sixth largest investor in Intel, according to LSEG data.

SoftBank shares closed down 4% 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.

SoftBank posted its first profit in four years in the April-June quarter as it raked in gains from its investment portfolios. It is a major shareholder in Arm Holdings, a British semiconductor and software design company.

Multiple challenges

Intel has struggled financially and recorded an annual loss of $18.8 billion in 2024, its first such loss since 1986, as it grapples with multiple challenges.

Its longtime rival AMD has been gaining share in Intel's mainstay personal computer and server semiconductor markets, while its ambitious and costly plan for a chip contracting business that rivals that of Taiwan's TSMC has failed to take off.

The company is now considering a significant change to its contract chip manufacturing business to win major customers, Reuters reported last month, in a potentially expensive shift from its previous strategies.

"Intel's dual role as designer and manufacturer/fabricator uniquely positions it as potentially the best platform in the U.S. to compete with TSMC," said Charu Chanana, chief investment strategist at Saxo.

Bloomberg News reported earlier on Monday that the U.S. government is in talks to take a 10% stake in Intel.

Tan, a chip industry veteran who also served as a SoftBank board member before quitting in 2022, thanked Son for "the confidence he has placed in Intel with this investment."

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.