SoftBank has agreed to buy $2 billion (€1.7 billion) of Intel stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions.
The Japanese company, which is adding Intel to an investment portfolio that includes AI linchpins Nvidia and Taiwan Semiconductor Manufacturing, will pay $23 a share – a small discount to Intel’s last close.
Shares of the US chipmaker, which will issue new stock to SoftBank, surged more than five per cent in after-hours trading. SoftBank’s stock fell as much as 5.4 per cent Tuesday in Tokyo, its most since April.
SoftBank, which owns Arm Holdings, has for decades tried to be a central player in AI, but has been largely a bystander to a global spending boom in hardware.
Progress has been slower than expected at Stargate, a $500 billion endeavour with OpenAI, Oracle and Abu Dhabi fund MGX to build data centres in the US.
Chief executive Masayoshi Son’s plan to design an energy-efficient chip to better compete alongside Nvidia through the “Izanagi” project has also yet to translate into a marketable product.
“It’s hard to see how much this investment contributes to either SoftBank’s value or short-term earnings,” said Tomoaki Kawasaki, senior analyst at Iwaicosmo Securities.
For Intel, the Tokyo-based company’s move delivers a strong vote of confidence in a storied US chipmaker that’s struggled to remain relevant in the AI sphere.
Intel aims to prove it can be a technology leader again after falling behind TSMC in contract chipmaking and Nvidia in chip design.
Chief executive Lip-Bu Tan met US President Donald Trump at the White House last week, helping lay the groundwork for discussions around ways to rescue Intel.
The company held talks with the Trump administration about a deal that would potentially turn the US into its biggest backer. Officials have discussed taking a stake of about 10 per cent in the chipmaker, Bloomberg News reported Monday.
For SoftBank, buying Intel stock expands its US footprint at a time Tokyo is pressing Washington to cut tariffs in exchange for investments in the US. SoftBank recently inked a deal to buy Foxconn Technology Group’s electric vehicle plant in Ohio in a move that could kick-start Stargate. That’s as some of Asia’s biggest companies including TSMC and Samsung Electronics reiterate plans to spend billions of dollars on factories in the US.
But the timing of the deal – days after Mr Trump and Mr Tan’s meeting – is spurring fears that politics may have played a part. “If it’s political, then it’s not profit-motivated,” said Amir Anvarzadeh, Japan equity strategist at Asymmetric Advisors. “Investing in Intel to appease Trump is perhaps not seen as good business.”
In announcing its investment in Intel, SoftBank paid tribute to the chip pioneer’s history.
“For more than 50 years, Intel has been a trusted leader in innovation,” Mr 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.”
Intel CEO Tan, a chip industry veteran who took the helm this year, has invested in start-ups alongside Mr Son and spent years on SoftBank’s board as an independent director before resigning in 2022.
“I appreciate the confidence he has placed in Intel with this investment,” Mr Tan said. – Bloomberg
