Japan’s tech investor SoftBank is taking over nearly 2% of Intel for USD 2 billion. This initiative is to help Intel as it faces several challenges, including financial losses and lagging behind in the AI chip market.
The initiative was announced to regain its footprint in the artificial intelligence (AI) chip race after years of missteps. The Japanese investment giant is paying USD 23 per share, slightly below Intel’s Monday closing price of USD 23.66.
The deal aims towards SoftBank’s sweeping AI ambitions, which include its USD 500 billion Stargate data centre project in the US.
The funding for Intel is a help. The company posted a USD 18.8 billion loss in 2024, its first annual loss since 1986. Rival AMD has steadily chipped away at its dominance in the personal computer and server markets, while Taiwan’s TSMC continues to hold in contract chip manufacturing.
Intel’s is making a major shift in its contract chip strategy in a bid to engage big customers, though such a move could be expensive.
The Japanese firm has already committed USD 30 billion to OpenAI and is backing the Stargate project, which will see massive data centres built across the U.S. As part of that project, Taiwan’s Foxconn said on Monday it would build data centre equipment with SoftBank at its Ohio facility, formerly an electric vehicle plant.
Executive Statement
According to the Masayoshi Son, SoftBank CEO, the deal is a strategic bet on America’s semiconductor base, saying the group believes advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role.