WH in Talks to Take 10% Stake in Intel

SoftBank Group is making a surprise $2 billion investment in struggling chipmaker Intel, buying shares at $23 apiece. The move comes just days after the White House began exploring a 10% stake in Intel, mirroring the U.S.-Nippon Steel deal and MP Materials, where the federal government secured "golden shares."

Bloomberg first reported the SoftBank deal to purchase $2 billion worth of Intel shares at $23 apiece. The news sent Intel up 6% in New York premarket trading, pushing shares into the $25 handle. Year-to-date, the stock is up 18% after bottoming near $20 - this is a level not seen since 2013. Shares last peaked above $64 in 2021.

"For more than 50 years, Intel has been a trusted leader in innovation," SoftBank CEO Masayoshi Son wrote in a statement. He added, "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."

Intel CEO Lip-Bu Tan, a longtime SoftBank associate, added: "I appreciate the confidence he has placed in Intel with this investment."

For Intel, the deal marks a significant vote of confidence for the one-time powerhouse chipmaker that has since fallen behind TSMC in manufacturing and Nvidia in design. CEO Lip-Bu Tan met with President Trump last week, and Bloomberg reported the administration was weighing options to acquire a 10% stake in Intel.

Bloomberg noted that SoftBank is adding Intel to a portfolio that already includes Nvidia, TSMC, and Arm Holdings. While Son has sought a major role in the AI race, progress has been slow. Stargate, the $500 billion data center initiative backed by Trump and involving projects with OpenAI, Oracle, and Abu Dhabi's MGX, has struggled to gain momentum.

Iwaicosmo Securities analyst Tomoaki Kawasaki told clients, "It's hard to see how much this investment contributes to either SoftBank's value or short-term earnings."

Some Wall Street analysts suspect political motives, given the timing after Trump met with Tan. "If it's political, then it's not profit-motivated," said Amir Anvarzadeh of Asymmetric Advisors. "Investing in Intel to appease Trump is perhaps not seen as good business."

SoftBank's US footprint is expanding regardless. It recently bought Foxconn's Ohio EV plant, a move that could help Stargate, as Asian chip giants like TSMC and Samsung commit billions to the 'America First' agenda.

Bloomberg reported Washington was in talks to convert up to $10.9 billion in Chips Act grants into equity, which could have given the government roughly a 10% stake and made it Intel's largest shareholder.

This mirrored the Pentagon's $400 million preferred equity purchase of MP Materials last month, which we had flagged ahead of time despite others calling it "unprecedented."

Talks remained fluid; the exact stake size, timing, and whether prior disbursements (Intel had already received $2.2 billion) remained unclear. White House officials declined to provide specifics but hinted that other Chips Act awards could also be converted to equity.

At $25 a share ... Intel's turnaround story appears to be gaining momentum and could be an entry point for bulls. We're sure there will be many chip contracts headed Intel's way from the federal government as America First gains momentum.