The Japanese technology investment behemoth Softbank said this week that it is purchasing a $2 billion stake in the US computer chipmaker Intel, which caused its shares to soar.

The investment, which was made public early this week, is "a lifeline for Intel and its ambitions to manufacture chips for external customers," according to the company's former CEO, who invested billions of dollars in the initiative.

According to the firms, SoftBank will purchase Intel common stock for $23 a share under the terms of the agreement. Based on LSEG data, SoftBank would rise to become the sixth-largest Intel investor.

According to the US company's market capitalization at Monday's close of trade, SoftBank's investment will be made through a primary issuance of common stock by Intel, representing a little less than two percent equity share.

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Following the announcement, SoftBank's stock fell more than five percent on Tuesday, while Intel's stock rose 5.6 percent during after-market hours trading.

The Japanese company is expected to only take an equity stake in Intel and will neither seek a board seat nor commit to buying Intel's chips.

 

After being overtaken by competitors like Taiwan Semiconductor Manufacturing Corp., Intel has been going through a difficult reorganization as it attempts to catch up in the AI chip market.

Last month, Intel announced yet another quarterly loss. According to Market Watch, US President Donald Trump recently demanded that CEO Lip-Bu Tan go, but he softened his stance after meeting with Tan last week.

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Tan expressed his satisfaction with SoftBank's investment in a statement on Monday, adding, "I appreciate the confidence [Son] has placed in Intel."

Due to a number of issues, Intel has experienced financial difficulties and in 2024 reported an annual loss of $18.8 billion, the first since 1986.

While Intel's ambitious and expensive plan for a chip contracting business that rivals Taiwan's TSMC has failed to take off, its longstanding rival AMD has been gaining market share in Intel's core personal computer and server semiconductor sectors.

The cash from Intel is the most recent in a series of massive investment announcements made by the Japanese business in 2025, including leading the financing for Stargate and investing $30 billion in ChatGPT maker OpenAI.

As part of the Stargate project, Foxconn of Taiwan intends to work with SoftBank to produce data center equipment in the latter's old electric car factory in Ohio.