Softbank Builds on AI Investments With $2 Billion Intel Partnership

Japanese conglomerate SoftBank is making a $2 billion investment into chipmaker Intel.

The companies say the new arrangement, announced Monday (Aug. 18), represents a commitment to investing in advanced technology and semiconductor innovation in the U.S.

“Semiconductors are the foundation of every industry,” Masayoshi Son, chairman and CEO of SoftBank, said in a news release. “For more than 50 years, Intel has been a trusted leader in innovation. 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.”

As PYMNTS wrote earlier this year, Intel has been struggling for several years, with that rocky period beginning as it started missing key product deadlines in the mid 2010s.

“Once the industry leader, Intel became hampered by internal bureaucracy, a rigid culture, and a hardware-first mindset that lagged behind a software- and AI-driven future, while competitors like ARM and Nvidia thrived,” that report said.

The company also famously turned down Apple’s request to make chips for the iPhone, setting the stage for Qualcomm. In the third quarter of last year, Intel posted its largest quarterly loss of $16.6 billion.

Intel’s new CEO, Lip-Bu Tan, said he recognized the company’s many problems during the keynote address at Intel’s conference in Las Vegas in April.

“We fell behind on innovation. We have been too slow to adapt to meet your needs. You deserve better, and we need to improve, and we will,” Tan told his audience of customers and vendors. “Please be brutally honest with us.”

The release noted SoftBank’s ongoing efforts in the AI sector, such as a $40 billion investment into OpenAI, described as largest private tech deal ever.

Among its other projects is “Stargate,” with SoftBank teaming with OpenAI and Oracle to invest an initial $100 billion and up to $500 billion over the next four years to build AI infrastructure.

However, a report last month from the Wall Street Journal (WSJ) said the Stargate project had gotten off to a slow start. Six months after the initial launch, the company operating the effort had not made a deal to build a data center and has pivoted from investing $100 billion immediately to building one data center by the end of this year.

The report said this slow start was due in part to disagreements between SoftBank and OpenAI  over where to build data centers. The companies issued a joint statement to the WSJ saying they were progressing in several states and moving quickly to deliver AI infrastructure.