SoftBank Pours $2B into Intel as U.S. Eyes 10% Stake

Major Investment from SoftBank and Potential Government Stake in Intel

SoftBank Group has made a significant move by agreeing to invest $2 billion in Intel, a struggling chip manufacturer. This investment marks a positive development for the company, especially as it faces challenges in the semiconductor industry. The private sector's support comes at a time when Intel is also seeking assistance from the government.

Recent discussions have emerged about the Trump administration potentially taking a 10% stake in Intel. This move is seen as an effort to revitalize the company and strengthen U.S. semiconductor manufacturing capabilities. While the details of this potential investment are still being worked out, the talks highlight the growing interest in supporting Intel’s future.

On Monday, Intel announced that SoftBank would purchase $2 billion worth of its stock at $23 per share. This price is slightly below the company’s closing price of $23.66 on that day. The investment translates to approximately 87 million shares, giving SoftBank ownership of around 2% of Intel. As a result, SoftBank becomes the sixth-largest shareholder of the company, according to S&P Global Market Intelligence. Investors responded positively to this news, with Intel's shares rising 4.5% in after-hours trading, despite a 3.7% decline during regular trading hours.

This additional investment is crucial for Intel, but analysts emphasize that the company needs more than just financial support. It must secure commitments from customers for its chip design and fabrication businesses to regain momentum. Intel reported a net loss of $2.9 billion in the second quarter, underscoring the need for strategic moves to stabilize its position in the market.

In December, SoftBank pledged to invest $100 billion in U.S. projects over the next four years. This commitment is part of a broader trend among executives aiming to build goodwill with the Trump administration. However, the structure and terms of a potential government equity investment in Intel remain under discussion.

The conversations surrounding a possible government stake add to the ongoing developments for Intel in Washington. Earlier this month, discussions between the White House and Intel intensified when President Trump called for CEO Lip-Bu Tan to resign due to his ties to China. Tan met with the president at the White House, where they discussed the idea of a government stake in the company.

Bloomberg News previously reported on these discussions, noting that one option under consideration involves converting some of the funds Intel was set to receive from the 2022 Chips and Science Act into an equity stake. Commerce Secretary Howard Lutnick is exploring ways to improve returns on investments made to companies like Intel under the law.

Intel was the largest beneficiary of the Chips and Science Act, with the Biden administration announcing in 2024 that the company was eligible to receive about $8 billion for new or expanded chip-fabrication facilities in Ohio and across the U.S. The funding would be provided after meeting certain milestones. Lutnick believes that converting these funds into an equity stake could be the best way for the government to support Intel while protecting taxpayer interests.

However, the Ohio facility has faced delays, causing frustration among lawmakers who believe Intel misled the government when the money was awarded. These concerns have been compounded by worries about Tan’s business relationships in China.

The exact value of the potential 10% stake in Intel is still under discussion. With a market value of approximately $100 billion, a 10% stake would make the government one of the company’s largest shareholders. The administration is looking for ways to boost American market share in semiconductor manufacturing, with officials highlighting Intel as the U.S. company with the best chance of competing with Taiwan Semiconductor Manufacturing Co., the dominant player in chip fabrication.

An Intel stake deal would be another example of Trump’s personal interventions in the U.S. private sector. The president recently secured a commitment from Nvidia and Advanced Micro Devices to pay the government 15% of their chip sales in China in exchange for export licenses. In the case of Nippon Steel’s takeover of U.S. Steel, he received a “golden share” granting him influence over how the company operates.

Intel shares have declined more than 50% since the start of last year as the once-dominant chip maker deals with rising costs and a product line that industry analysts consider outdated for the age of artificial intelligence. Tan has been working to turn the company around since taking the helm in March, following the departure of Pat Gelsinger, who left the company late last year after making the Chips Act funding a key part of his strategy.

Led by founder and CEO Masayoshi Son, SoftBank has managed hundreds of billions of dollars in tech investments, including major stakes in Amazon.com, Apple, DoorDash, and WeWork. In 2016, the firm became a significant player in semiconductors by acquiring British chip designer Arm Holdings for $32 billion.