The Japanese group, SoftBank will purchase Intel common stock at $23 per share, giving it close to a 2% stake and making it one of Intel’s top shareholders. 

The announcement, made after U.S. markets closed on Monday, sent Intel shares up more than 5% in after-hours trading, while SoftBank’s stock slipped over 5% in Tokyo.

Masayoshi Son, chairman and CEO of SoftBank, said, “Semiconductors are the foundation of every industry. 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.”

The investment lands at a challenging moment for Intel. Under new CEO Lip-Bu Tan, the company has been cutting costs and narrowing focus. It shut down its automotive chip division earlier this year, slashed between 15% and 20% of its foundry workforce, and doubled down on its client and data centre chip portfolio, where it still lags behind rivals Nvidia and AMD.

Tan, who has been navigating both corporate restructuring and political issues, welcomed SoftBank’s support. “We are very pleased to deepen our relationship with SoftBank, a company that’s at the forefront of so many areas of emerging technology and innovation and shares our commitment to advancing U.S. technology and manufacturing leadership. Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment.”

Beyond chips, SoftBank’s CEO Son has been positioning the group as a key player in the next wave of artificial intelligence infrastructure. Earlier this year, SoftBank acquired Foxconn’s Lordstown, Ohio factory, which will be repurposed to manufacture AI data centre equipment. 

The site forms part of the $500 billion Stargate project, a venture involving SoftBank, Oracle and OpenAI, aimed at building large-scale AI server capacity in the United States.

Meanwhile, U.S. politics are heavy over the semiconductor sector. The Trump administration has floated the idea of converting CHIPS Act funds into equity, potentially giving Washington as much as a 10% stake in Intel.

The White House has also threatened new tariffs on imported chips in a bid to strengthen domestic production and cut reliance on Asian giants like TSMC and Samsung.

U.S. shares rose 7% on Thursday, with a further 2.6% gain after hours, while Frankfurt-listed shares climbed 3.6% on Friday. Investors are betting that government backing could provide much-needed stability for the struggling chipmaker.

The potential investment was first reported by Bloomberg, noting discussions that followed an 11 August meeting between President Donald Trump and Intel’s Chief Executive Officer, Lip-Bu Tan. 

The talks reportedly focused on how Washington could accelerate domestic semiconductor manufacturing, with the delayed Ohio mega-fab project expected to be a central part of the plan.

The development comes amid one of Intel’s most challenging periods in decades. The company posted a $2.9 billion net loss in the second quarter of 2025, driven by $1.9 billion in severance costs and $800 million in asset impairments. 

A restructuring plan has seen 25,000 jobs cut and major chip fabrication projects in Germany, Poland, and Ohio scrapped or delayed.

Trump’s involvement with Intel has been far from smooth. Days before the reported stake talks, he called for Tan to resign over what he described as “highly conflicted” ties to Chinese firms. 

His comments followed a letter from Senator Tom Cotton, alleging Tan’s investments in over 100 Chinese technology companies, including at least eight linked to the People’s Liberation Army.

Tan’s past leadership of Cadence Design Systems has also resurfaced in political debate. In July 2025, the company admitted to illegally exporting chip design software to a Chinese military university, paying $140 million in fines.

Despite political issues, Intel aims to continue cooperating with the White House. “Intel is deeply committed to supporting President Trump’s efforts to strengthen U.S. technology and manufacturing leadership,” a company spokesperson said. 

“We look forward to continuing our work with the Trump Administration to advance these shared priorities, but we are not going to comment on rumours or speculation.”

Tan has also made it apparent that there will be no return to unchecked spending. “There are no more blank cheques. Every investment must make economic sense,” he said.

Intel has already secured nearly $8 billion in federal subsidies through the CHIPS and Science Act, placing it among the largest beneficiaries of U.S. semiconductor funding.

Analysts suggest a direct government stake could help stabilise Intel’s finances and restore competitiveness against rivals Nvidia, AMD, and TSMC.

Sources told The Wall Street Journal that the discussion will be wide-ranging, with Tan expected to share details of his personal and professional history, as well as outline proposals for closer cooperation between Intel and the U.S. government. 

The visit comes at a time when tensions between the White House and the semiconductor giant have escalated.

Trump’s intervention last week was unusual, even by Washington standards. On 7 August, he declared Tan “highly conflicted” because of his ties to Chinese firms, adding there was “no other solution to this problem” but his resignation. 

The statement triggered issues among investors and industry analysts, given Intel’s central role in America’s semiconductor and defence supply chains.

Part of the controversy comes from earlier revelations. In April, Reuters reported that Tan had invested at least $200 million in hundreds of Chinese advanced manufacturing and chip companies, some allegedly linked to the Chinese military. 

The disclosure fuelled security concerns, especially as Intel receives billions of dollars in federal subsidies under the CHIPS Act.

Tan’s career history has also attracted some questions. From 2008 to December 2021, he served as CEO of Cadence Design Systems, a chip design software firm. During that time, Cadence sold products to a Chinese military university reportedly involved in nuclear simulation research. Last month, Cadence agreed to plead guilty and pay over $140 million to settle U.S. charges related to those sales.

Since taking over Intel in March 2025, Tan has faced enormous challenges. The company reported an $18.8 billion net loss in 2024 and a $2.9 billion loss in the second quarter of 2025. 

His response has been drastic, announcing 25,000 job cuts, cancelling multiple factory projects, and acknowledging that Intel was “too late” to compete in AI training chips. Tan has adopted what he calls a policy of “brutal honesty” and declared “no more blank checks” for speculative ventures.

In a statement following Trump’s remarks, Tan said he shared the president’s commitment to advancing U.S. national and economic security. Monday’s meeting will test whether that commitment is enough to secure his position, and determine if Intel can maintain its strategic standing in the U.S. chip sector at a time of growing geopolitical rivalry.

The accusation, which was posted Thursday on Trump’s social media platform, has left the tech and political sectors in shock, increasing evaluation on one of America’s most strategically important chipmakers.

“The CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem. Thank you for your attention to this problem!” Trump posted on Truth Social.

Trump offered no specific evidence to back his claim, but his statements come in the wake of some Republican issues on the company. 

On Wednesday, Senator Tom Cotton had written to Intel’s board demanding clarity on Tan’s personal and professional ties to Chinese entities. 

Cotton’s letter raised red flags about Tan’s leadership at Cadence Design Systems—where tools were reportedly sold to a Chinese military-linked university—and his subsequent investments in Chinese tech firms through his venture capital arm, Walden International.

A Reuters report detailed that Tan had channeled over $200 million into various Chinese companies, with several reportedly linked to the country’s military or national security infrastructure. Cotton has questioned whether such entanglements are compatible with Intel’s receipt of federal funds under the CHIPS and Science Act.

“The new CEO of @intel reportedly has deep ties to the Chinese Communists. U.S. companies who receive government grants should be responsible stewards of taxpayer dollars and adhere to strict security regulations. The board of @Intel owes Congress an explanation,” Cotton posted on X, attaching his formal letter.

Tan, who assumed the role of CEO in March 2025, has been steering Intel through a major overhaul in the face of stiff competition from Nvidia, AMD, and TSMC. 

His tenure has so far involved aggressive cost-cutting: thousands of job losses, cancelled factory expansions, and efforts to offload non-core business units. His stated aim is to restore Intel’s reputation as a leader in chip engineering, a position it has steadily lost over the last decade.

But these leadership decisions now risk being overshadowed by the political fallout. Intel’s strategic importance to U.S. national security is significant. It is the single largest beneficiary under the CHIPS Act, with $8.5 billion earmarked for new manufacturing facilities across Arizona, New Mexico, Ohio, and Oregon. 

The controversy around Tan’s alleged links to China could compromise the company’s ability to maintain bipartisan confidence and secure future federal support.

Intel has not yet responded to multiple requests for comment on the matter. Tan himself has remained silent as calls for transparency mount.

Meanwhile, investors are reacting. Intel’s stock fell nearly 5% in premarket trading following Trump’s post, reflecting growing anxiety over potential leadership instability and the political issues surrounding the company. 

With Washington increasingly wary of Beijing’s influence in the tech supply chain, the timing of these revelations, whether substantiated or not, puts Intel in an uncomfortable spotlight.

The company confirmed plans to reduce headcount to 75,000, down from over 96,000, via attrition and targeted layoffs, many of which have already been executed.

This downsizing is just one piece of an overhaul led by newly appointed CEO Lip-Bu Tan, who stepped in earlier this year to confront years of strategic missteps and financial underperformance. 

Despite a short-term bump in revenue, Intel expects to post a larger-than-anticipated third-quarter loss of 24 cents per share, well above the 18-cent loss forecast by Wall Street analysts. Shares tumbled nearly 6% in Frankfurt following the announcement.

Tan, who is pressing for a more cost-conscious and focused Intel, made his intentions clear in a memo to employees: “There are no more blank checks. Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution.”

That message is a big difference from the company’s previous approach under former CEO Pat Gelsinger, who championed aggressive expansion plans and heavy investment in next-generation manufacturing processes like 18A and the upcoming 14A node.

Tan, however, appears sceptical of that strategy’s commercial viability, particularly when it comes to selling these technologies to external customers. Reuters recently reported that Intel may abandon plans to offer 18A tech to outside firms altogether.

In what he describes as a “disciplined approach,” Tan is halting construction of new chip plants in Poland and Germany, slowing down development in Ohio, and consolidating packaging operations from Costa Rica to more established hubs in Vietnam and Malaysia.

“I do not subscribe to the belief that if you build it, they will come,” he said in a call with analysts, adding that he will personally approve all major chip designs going forward.

Chief Financial Officer David Zinsner told Reuters the company has taken a “surgical” approach to job cuts, removing about half of Intel’s management layers in the process. The aggressive cost-cutting contributed to restructuring expenses of $1.9 billion in the second quarter alone.

Despite the grim forward-looking forecast, there were signs of short-term improvement. Intel’s second-quarter revenue held flat at $12.9 billion, breaking a year-long streak of declining sales and surpassing analysts’ expectations of $11.92 billion. 

Still, adjusted earnings showed a loss of 10 cents per share, in stark contrast to estimates of a 1 cent gain. The unadjusted figure was worse: a 67-cent-per-share loss.

Intel’s competitiveness has eroded significantly over the past decade. While Nvidia has surged to the top in the high-growth AI chip segment, and AMD continues to nibble away at its market share in both consumer and server chips, Intel has struggled to deliver products on time and budget. 

Its push into the chip foundry business—intended to rival industry leader TSMC—has largely faltered.

“They may have overspent on 18A … but I think this is the painted picture of a new fiscally disciplined base that they’re going to go from here. I think that’s the right approach,” said Ben Bajarin, CEO of Creative Strategies.

The global economic backdrop hasn’t helped. Although semiconductors have been spared from sweeping tariffs, customers remain cautious due to macroeconomic challenges, usually pulling forward orders or delaying long-term commitments.

This restructuring, the first major act by Intel’s newly appointed CEO, Lip-Bu Tan, aims to dismantle bloated bureaucracy, cut operating costs, and pivot sharply toward engineering efficiency. 

The company’s problems didn’t start yesterday. Intel has been losing ground, value, and relevance for years. In five years, its stock has plunged by 67%. 

Competitors like Nvidia have surged ahead. Intel, once a leader, is now trying to catch up in key sectors like artificial intelligence chips and high-performance computing. 

The decline hasn’t just been in market numbers, but internal too. Management became top-heavy, decision-making slow, and innovation sluggish.

Tan took over in late 2024 after Intel axed around 15,000 roles as part of a $10 billion cost-cutting plan. That wasn’t enough. Now, he’s going further. Just weeks into his tenure, he’s reportedly flattening the corporate hierarchy. Key chip divisions now report directly to him. At a recent staff town hall, he said: “We will have to make tough decisions.”

And this is one of them.

Intel had around 108,900 employees at the end of 2024. This new wave of cuts will remove about 21,000 of them. 

Across the tech sector, layoffs are increasing. Over 23,500 workers have already been dismissed across 93 companies this year alone.

We’re also seeing Intel retreat from parts of its business. Earlier this month, it sold 51% of its Altera semiconductor arm to private equity firm Silver Lake. Altera was once key to Intel’s broader chip ambitions. 

That sale goes beyond a shift in assets—it shows a recalibration of priorities. Non-core units are being spun off or shut down, and every dollar is being redirected toward tech areas where Intel can still compete.

For now, the company hasn’t commented. No official statements have been released.

But the timing of the news is no coincidence. Intel is due to release its Q1 earnings this week. The layoffs are likely to top the conversation during Tan’s first earnings call as CEO. 

Recently, Intel has been losing investors’ trust and having internal issues in its manufacturing and design operations. The company has brought in Lip-Bu Tan to help resolve this.

Tan, a veteran of the semiconductor industry, previously served as CEO of Cadence Design Systems and was a member of Intel’s board until August 2024. His experience in both chip design and venture capital places him as a strategic choice to scale up Intel’s ongoing transformation. 

Following the announcement, Intel’s shares surged by 12% in extended trading, showing that investors are confident about his leadership.

In a letter to employees, Tan acknowledged the challenges ahead while stating that Inte has the ability to regain its competitive edge. “Together, we will work hard to restore Intel’s position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before,” he stated.

Intel has been under pressure to adapt to the fast-changing semiconductor market, particularly as competitors such as Nvidia and TSMC continue to dominate the sector. 

The company’s efforts to expand its contract manufacturing business have brought issues about cash flow, with reports indicating that players in the space, including Broadcom and TSMC, have explored potential partnerships or acquisitions of Intel’s assets.

Analysts have welcomed Tan’s appointment, stressing his technical expertise and deep industry connections as key assets.

Jack E. Gold, an analyst at J. Gold Assocommented, “Tan has an intrinsic understanding of the semiconductor industry, both from a product design aspect as well as the needs of enabling chip manufacturing—an area that Intel Foundry needs help in making their tools more user-friendly and accessible for potential customers.”

Tan’s leadership arrives at a time of geopolitical tensions affecting the semiconductor industry. The United States government has pushed for increased domestic chip production, with former President Donald Trump advocating for policies that could reshape global supply chains. 

While Intel stands to benefit from government incentives, the company must also contend with growing competition from Asian manufacturers.

Nonetheless, analysts believe the appointment of Lip-Bu Tan shows that Intel is ready to maintain its current structure rather than split its design and manufacturing operations.