SoftBank Buys US$2bn Stake in Intel Amid Its CEO Controversy
Japanese investment giant SoftBank has announced that it has made a US$2bn investment in Intel, the US-based tech titan.
This multi-billion-dollar deal represents a significant vote of confidence for Intel, which has been under pressure in recently, partly because of the scrutiny of US President Donald Trump who last week called for the resignation of the firm's CEO Lip-Bu Tan.
The deal, finalised on Monday, sees SoftBank purchasing Intel's common stock at US$23 per share. In total, SoftBank now owns approximately 2% of the American semiconductor and electronics manufacturer.
Following the announcement of the deal, Intel's shares rose by 6%, which offers some respite for a company that has been troubled by mounting operational and political challenges.
An investment in the American tech sector
But why now? SoftBank's decision to invest in Intel has both financial and political motivations.
"The investment comes as both Intel and SoftBank deepen their commitment to investing in advanced technology and semiconductor innovation in the US," the two companies said in a joint statement this week.
SoftBank's commitment aligns with the Trump administration's broader agenda to reduce the US's dependence on Asian chip manufacturers, while simultaneously strengthening its own production capabilities.
Sovereignty in the semiconductor sector is of growing importance, all across the world.
For SoftBank, the move also represents a strategic expansion of its semiconductor portfolio, which already includes large stakes in several AI infrastructure companies and the British chip designer Arm, which it acquired in 2016.
Why is Trump targeting Intel?
The investment announcement follows a turbulent period for Intel's leadership, particularly with regards to the position of CEO Lip-Bu Tan, who took the helm last year.
Last week, Trump called for the immediate resignation of the CEO, owing to his alleged links to Chinese businesses. "The CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem," Trump wrote on his Truth Social platform.
According to Trump, Tan has made personal investments totalling at least US$200m in hundreds of Chinese firms, between 2012 and December 2024.
Republican Senator Tom Cotton echoed the president's concerns, suggesting that Tan's previous role as CEO of Cadence Design Systems – which pleaded guilty to US export control violations – makes him unsuitable to lead Intel.
The senator then wrote to Intel's board, stating that Tan's "associations raise questions about Intel's ability" to serve as a "responsible steward of American taxpayer dollars and to comply with applicable security regulations".
Intel's response
Tan has since pushed back against these allegations, dismissing them as "misinformation" in an internal staff note.
"I have always operated within the highest legal and ethical standards," he explained, referencing his four-decade career in the US technology sector.
Intel has also defended its leadership publicly, batting away the accusations. "Intel, the board of directors and Lip-Bu Tan are deeply committed to advancing US national and economic security interests," the firm wrote in a statement.
The company also emphasised that its investments are in alignment with Trump's America First agenda, which centres on bringing technology manufacturing back to the US.
Intel's place in the semiconductor sector
Intel's acceptance of SoftBank's investment reflects the company's ongoing struggles to compete with Asian rivals like the Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung.
Despite being one of the few US firms capable of manufacturing high-end semiconductors at scale, Intel has lost a large part of its market share in recent years.
The company has already cut thousands of jobs this year as part of cost-cutting measures while it attempts to scale back manufacturing investments to match customer demand.
Patrick Moorhead, Founder and CEO of Moor Insights & Strategy, has suggested that Trump's attack on Tan might reflect some broader disagreements he has with Intel's strategic direction.
"It's apparent to me that there was some negotiation amongst the two that Trump didn't like," he explains.
America's search for semiconductor sovereignty
With the Trump administration applying pressure to the US tech sector, experts are warning that leadership instability could hamper the country's progress when it comes to the manufacturing of semiconductors.
"Intel has been a hope for America to build out more chip capacity and has struggled to do so to date," says Janet Egan from the Center for a New American Security.
"It's important that we get continuity of leadership to support that ramping up of capacity."
As Intel absorbs pressure from all sides, this investment from SoftBank will provide it with some crucial support as it navigates the rocky terrain ahead.
