Intel just scored a $2 billion lifeline from Japan's SoftBank, giving the struggling chip giant a bump at a time when the US government is considering taking an even bigger swing by snapping up 10% of the company. SoftBank's purchase amounts to about 87 million shares, at $23 each—a slight markdown from Monday's close—and hands the Japanese conglomerate a 2% stake, placing it as Intel's sixth largest shareholder, per the Wall Street Journal. The announcement sent Intel's stock jumping more than 5% in after-hours trading, reports the BBC.
"Semiconductors are the foundation of every industry," SoftBank CEO Masayoshi Son said in a statement, per the AP. "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." The government's interest is part of a broader push to shore up American chipmaking. Washington is mulling whether to transform part of Intel's promised $8 billion in Chips Act funding—intended for new plants in Ohio and elsewhere—into an equity stake, which would make the feds one of the firm's top owners.
Commerce Secretary Howard Lutnick is reportedly looking for ways to turn those taxpayer dollars into something with more staying power for both Intel and the government. Intel has been bleeding cash, however, reporting a $2.9 billion loss in Q2, and lawmakers have been irked by delays on its Ohio project. CEO Lip-Bu Tan, who's now facing scrutiny over his China connections, has admitted the company has been "too slow to adapt."
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Meanwhile, President Trump has made his presence felt, pushing for Tan's resignation and hashing out the possible government stake in person with Tan just last week. SoftBank's move follows its earlier pledge to pour $100 billion into US projects, a nod to the current administration's appetite for private industry partnerships.
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