SoftBank’s massive $2 billion investment in Intel represents a powerful endorsement of CEO Lip-Bu Tan’s ambitious turnaround strategy for the struggling American chipmaker. This strategic partnership reunites two industry veterans whose relationship spans decades, with Masayoshi Son betting heavily on Tan’s ability to revive Intel’s fortunes in the competitive semiconductor landscape. The investment comes at a critical moment when Intel faces mounting pressure from rivals like Nvidia in artificial intelligence chips while grappling with foundry business challenges.
Masayoshi Son’s strategic bet on Intel could reshape the semiconductor industry
When Lip-Bu Tan stepped down from the SoftBank Group board in 2022 at a time when the Japanese company was grappling with soured investments, his parting message offered advice on how Masayoshi Son’s conglomerate could strengthen its business.
Three years later, a resurgent SoftBank has made a show of support by taking a $2 billion stake in Intel as Tan, now the storied American company’s CEO, seeks to turn around the embattled chipmaker.
Tan took Intel’s top job in March and is driving restructuring at the company, which lost out to Nvidia in artificial intelligence chips and whose foundry business is struggling.
“This is really aย vote of confidence of Masaย in the turnaround materialising over the coming years,” said Rolf Bulk, an analyst at New Street Research.
Why Lip-Bu Tan and Masayoshi Son’s decades-long relationship drives this
“Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment,” Tan said in a statement.
In addition to his time on SoftBank’s board, Tan became chairman of chip startup SambaNova, which received backing from SoftBank’s Vision Fund.
“Masa is brilliant; he’s a visionary. But he still needs people to provide safeguards, give him advice, and make him even more successful,” Tan wrote in his statement on leaving the SoftBank board.
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Son is known as a savvy political operator, appearing publicly with U.S. President Donald Trump twice in the months following the presidential election.
Last week, Tan met with Trump, who days earlier had called on him to resign due to his ties to Chinese firms. Washington is in talks to take a 10% stake in Intel, Bloomberg has reported.
“SoftBank’s investment helps but it is not what is going to move the dial for Intel,” said Amir Anvarzadeh of Asymmetric Advisors.
Son is making splashy investments again after some underperforming tech bets forced a period of retrenchment, with the conglomerate pursuing a $500 billion U.S. data centre venture with OpenAI, the maker of ChatGPT.
SoftBank has acquired a former electric vehicle factory from Foxconn in Ohio as it looks to advance its Stargate data center project.
Arm, which is controlled by SoftBank, plans to make its own chips, and the Japanese conglomerate also acquired chipmaker Graphcore last year.
Industry experts believe this contrarian bet carries limited downside risk
“The $2 billion investment should be viewed more as a strategic stake rather than a financial one,” said Nori Chiou, investment director at White Oak Capital Partners.
Industry experts say Tan still faces a mountain to climb to turn around Intel, which has suffered from years of management missteps.
“It is Masa making a contrarian bet but one where I think the downside risk is fairly limited,” said Bulk of New Street Research.
SoftBank’s $2 billion Intel investment exemplifies Masayoshi Son’s renewed appetite for bold technology bets after a period of conservative portfolio management. The strategic partnership leverages decades of trust between Son and Tan while positioning both companies to capitalize on artificial intelligence and semiconductor manufacturing opportunities. Despite Intel’s current challenges, the combination of experienced leadership, substantial financial backing, and complementary technology portfolios creates a foundation for potential long-term success.
GCN.com/Reuters