Intel $INTC shares jumped 5% in premarket trading after SoftBank said it would put $2 billion into the struggling chipmaker amid reports the U.S. government is considering taking an even bigger holding.
Intel shares jumped after SoftBank said it would put $2 billion into the struggling chipmaker amid reports the U.S. government is considering a stake.
I-HWA CHENG/AFP via Getty Images
Intel $INTC shares jumped 5% in premarket trading after SoftBank said it would put $2 billion into the struggling chipmaker amid reports the U.S. government is considering taking an even bigger holding.
The Japanese technology group said in a statement that the investment will give it about a 2% stake in the company. Masayoshi Son, SoftBank’s chief executive and chair, called Intel a “trusted leader in innovation” and said the investment shows confidence that production in the U.S. will expand, with Intel at the center.
Intel’s chief executive, Lip-Bu Tan, has been in the role for only five months. He inherited a company trying to pull out of a long slump marked by sliding sales, repeated losses and fading dominance in chip design. Already under Tan it has announced plans to lay off 20% of its staff to pare back bureaucracy within the company.
Tan said Tuesday that Intel was “very pleased to deepen our relationship with SoftBank, a company that’s at the forefront of so many areas of emerging technology and innovation and shares our commitment to advancing U.S. technology and manufacturing leadership.”
“Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment,” he added, referring to the SoftBank boss.
SoftBank’s move builds on a pledge to grow stateside, after President Donald Trump said it would channel $100 billion into the country over four years. The Japanese government has pressed Washington to ease tariffs in return for that investment.
The announcement came shortly after the report that the U.S. federal government is mulling an investment that would make it Intel’s largest shareholder. That deal would convert some or all of the grants allocated to the company under the U.S. bipartisan Chips and Science Act into equity, according to Bloomberg.
Intel was granted a combined $10.9 billion in grants under the act for commercial and military manufacturing, which former President Joe Biden signed into law in 2022.
A stake in Intel would be Trump’s latest try at intervening in the chipmaking industry. Last week, the U.S. government announced a deal that would have two of Intel’s rivals, Nvidia $NVDA and Advanced Micro Devices, pay 15% of their revenues from sales in China.
Danni Hewson, an analyst at AJ Bell, said the latest deal gives Intel “one vote of confidence that Tan’s recovery effort can be successful.”
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.