SoftBank to invest $2 billion in US chipmaker Intel

Intel is bagging a $2 billion capital injection from SoftBank Group in a major vote of confidence. The equity investment announced on Monday is a lifeline for the once-iconic U.S. chipmaker which has struggled to compete after years of management blunders. The troubled US chipmaker was left virtually with no foothold in the booming artificial intelligence chip industry.

The deal will make SoftBank a top-10 shareholder of Intel and add to the Japanese tech investor's ambitious bet on AI, which also includes the $500 billion Stargate U.S. data center project.

"SoftBank's investment helps, but it is not what is going to move the dial for Intel," said Amir Anvarzadeh, Japan equity strategist at Asymmetric Advisors.

Referring to Softbank CEO Masayoshi Son, he said, "It's more to maintain this very good relationship he has with Trump."

The deal follows media reports last week that the U.S. government may buy a stake in Intel, after a meeting between new CEO Lip-Bu Tan and President Donald Trump that was sparked by the President's demand for Tan's resignation over his ties to Chinese firms.

Notably, SoftBank's decision to invest in Intel is not connected to Trump, a source indicated.

"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," Son said in a statement.

It will pay $23 per Intel share, a slight discount to Monday's closing price of $23.66.

SoftBank's investment will come via a primary issuance of common stock by Intel, and, based on the U.S. company's market capitalisation at close of trading on Monday, represent an equity stake of just under 2%, an Intel spokesperson said.