Intel shares surged more than 5% in after-hours trading after Japanese technology investment giant SoftBank announced a $2 billion stake purchase in the struggling US chip maker. The deal comes amid broader discussions about unprecedented government intervention in the semiconductor industry.
SoftBank will pay $23 per share for its Intel stake under the agreement announced Monday. "The investment comes as both Intel and SoftBank deepen their commitment to investing in advanced technology and semiconductor innovation in the United States," the companies said in a joint statement.
Government stake discussions
The SoftBank investment follows reports that the Trump administration is in talks to take approximately 10% of Intel by converting government grants into shares. Bloomberg News first reported these discussions last week, though a White House spokesman told the BBC the reports "should be regarded as speculation" unless officially announced.
President Donald Trump met with Intel chief executive Lip-Bu Tan last week, just days after calling for his resignation. Trump accused Tan of being "highly conflicted" due to his earlier ties to China, highlighting the intense scrutiny facing the US chip industry.
Strategic implications and market response
Political scientist Sarah Bauerle Danzman from Indiana University described the potential government deal as a "major escalation" in the Trump administration's attempt to reshape the government's role in private sector. She warned it sets a "concerning precedent" by raising questions about companies following political agendas.
Dan Sheehan from Telos Wealth Advisors said the government's agenda is clear: "Accelerate domestic production, reduce dependence on Asia, and position Intel at the centre of the AI and national security landscape." He called SoftBank's investment a "clear vote of confidence" in Intel's turnaround efforts.
Intel remains one of the few US firms capable of manufacturing high-end semiconductors at scale, though it has lost ground globally to rivals like Samsung and TSMC. The company declined to comment on government discussions but said it was "deeply committed to supporting President Trump's efforts" to strengthen US manufacturing and technology.
The proposed Ohio manufacturing hub represents a key element in US efforts to strengthen domestic chip production amid broader tensions with China. Last week, Nvidia and AMD agreed to pay the US government 15% of their Chinese revenues as part of an unprecedented deal to secure export licences to China.
Sources used: "BBC", "Reuters", "Bloomberg News"
Note: This article has been edited with the help of Artificial Intelligence.
