SoftBank Group is investing $2 billion (€1.7 billion) in Intel through a share issue. This capital injection comes at a time when the US government is also considering acquiring a 10 percent stake by converting Chips Act subsidies into shares.
Intel is struggling with a loss of market share and is struggling to maintain its position in the growing AI chip market. Additional capital is welcome as Intel is investing heavily in new production capacity while simultaneously cutting costs and jobs.
Investment program underway
SoftBank’s capital injection makes the Japanese tech company a top 10 shareholder in the US chipmaker. The investment company is paying $23 per share, a slight discount on Monday’s closing price ($23.66). This is a primary issue of ordinary shares, resulting in an investment of just under 2 percent of the shares.
“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,” said SoftBank CEO Masayoshi Son. The investment strengthens SoftBank’s ambitious commitment to artificial intelligence, including the $500 billion Stargate data center project.
As is customary for SoftBank, the company is only acquiring a stake and is not seeking a seat on the board. Nor is it committing to purchase chips from Intel.
Government considers participation
Parallel to the SoftBank investment, according to Bloomberg sources, the Trump administration is in talks about converting Chips Act subsidies into a 10 percent government stake. Such a stake would be worth approximately $10 billion. Intel has been promised a combined subsidy of $10.9 billion for commercial and military production, which is roughly sufficient for government participation.
The talks followed a meeting between CEO Lip-Bu Tan and President Donald Trump. This meeting came about in response to Trump’s call for Tan to step down because of his ties to Chinese chip companies. A person familiar with the situation emphasizes that SoftBank’s decision to invest is unrelated to Trump.
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