Intel gets $2b lifeline in the form of SoftBank equity investment

Intel is getting a $2 billion capital injection from SoftBank Group in a major vote of confidence for the troubled US chipmaker in the middle of a turnaround.

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The equity investment, announced by the companies on Monday, is a lifeline for the once-iconic US firm which has struggled to compete after years of management blunders that left it with virtually no foothold in the booming artificial intelligence chip industry.

It will make SoftBank a top-10 shareholder of Intel and add to the Japanese tech investor's ambitious bet on semiconductor and Al assets that includes the $500 billion Stargate US datacenter project.

SoftBank also held talks with Intel on buying its contract chipmaking business ahead of the investment announcement, the Financial Times reported on Tuesday, citing multiple people with knowledge of the talks.

Intel has invested billions of dollars in setting up a contract manufacturing business that has struggled to compete with Taiwan's TSMC and barely attracted external customers.

"SoftBank's investment helps, but it is not what is going to move the dial for Intel," said Amir Anvarzadeh, Japan equity strategist at Asymmetric Advisors.

"It's more to maintain this very good relationship he has with Trump," he said, referring to SoftBank CEO Masayoshi Son.