Softbank announces it's buying a $2 billion stake in Intel as the Trump administration reportedly considers a 10% slice of the bright blue chipmaking pie
What a difference a few days makes. After reports indicated that the US government was in talks to take a stake in Intel late last week, a new Bloomberg report says the Trump administration is eyeing up a hefty 10% stake in the chipmaker—while Japanese investment giant Softbank has announced it's buying a $2 billion stake of its own.
The announcement was revealed on Intel's own newsroom page, confirming that Softbank had signed a "definitive securities purchase agreement" to make a $2 billion investment in Intel common stock.
Masayoshi Son, the Chairman & CEO of SoftBank Group Corp., said: "For more than 50 years, Intel has been a trusted leader in innovation. 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."
New Intel CEO Lip-Bu Tan commented: "Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment." It's been quite the change in fortunes in recent days for the Intel chief, after he was forced to respond to calls to resign from President Trump regarding his involvement with Chinese companies earlier this month.
Still, a meeting between the two last week appears to have gone so well, the US government is now eyeing up a substantial piece of Intel—and a serious investment from Softbank certainly seems to have done wonders for the chipmaker's share price, which rose by more than five percent at the news.
An interesting point to note is Softbank's existing involvement in the chipmaking space, particularly in regards to its previous ownership of mobile chip behemoth Arm, before the company was put out to public offering. Softbank still owns around 90% of shares in Arm Holdings, while its investment fund pumps money into several other tech firms—many of which might be interested in Intel Foundry, which is still searching for customers for its 14A node.
Should Softbank push Arm towards Intel's efforts, it might go some way to propping up its beleaguered foundry business in a way that could potentially work out well for all sides involved. Certainly, Softbank's gigantic investment funds make it a major player in the tech industry, and let's not forget its substantial funding of OpenAI. Which, now I think of it, seems very interested in making hardware of its own. It's all looking like one big circle at the moment, isn't it?