Intel secures $2 billion support to ease mounting business struggles

US-(Special-Correspondent / Web Desk)-Intel is set to receive a much-needed $2 billion capital boost from Japan’s SoftBank Group, a move that signals fresh confidence in the struggling U.S. chipmaker. The equity investment, announced Monday, comes at a crucial time as Intel works to revive its business and catch up in the fast-growing artificial intelligence (AI) chip market.

The deal positions SoftBank as one of Intel’s top-10 shareholders, with the Japanese tech giant purchasing shares at $23 each—slightly below Intel’s Monday closing price of $23.66. This primary issuance of common stock gives SoftBank an equity stake of just under 2%.

For SoftBank, the investment fits neatly into its broader AI strategy. The company is already backing large-scale projects such as the $500 billion Stargate data center initiative in the U.S. By taking a significant position in Intel, SoftBank is betting on the American semiconductor leader to play a central role in the global AI and advanced manufacturing landscape.

Intel, meanwhile, is facing mounting challenges. After years of management missteps, the company has lost ground to rivals like Nvidia in the AI chip race. Its new CEO, Lip-Bu Tan, has been tasked with steering a turnaround and restoring the company’s competitiveness. Reports last week suggested that the U.S. government may also consider acquiring a stake in Intel, though officials clarified that SoftBank’s move is independent of the Trump administration.

SoftBank’s founder and CEO, Masayoshi Son, emphasized the strategic nature of the deal. “This investment reflects our confidence that semiconductor manufacturing will continue to grow in the U.S., with Intel at the center of it,” he said.

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The $2 billion injection offers Intel financial breathing room and renewed investor confidence as it works to rebuild its reputation in a rapidly evolving AI-driven world.

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

SoftBank shares dropped more than 5% 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.

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.

SoftBank declined to provide more details on the Intel investment when asked to comment by Reuters.

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.

On Monday, Taiwan’s Foxconn said it plans to manufacture data centre equipment with SoftBank at the Taiwanese firm’s former electric vehicle factory in Ohio as part of the Stargate project.