SoftBank’s Son Backs Ally Tan with $2 Billion Intel Investment: What This Means for Tech Investors and Entrepreneurs
TOKYO — When Lip-Bu Tan stepped down from SoftBank Group’s board in 2022 amid the company’s struggles with troubled investments, he left behind advice on how Masayoshi Son’s conglomerate could strengthen its operations.
Three years later, SoftBank has made a significant show of support by acquiring a $2-billion stake in Intel, where Tan now serves as CEO. The move comes as Tan leads efforts to restructure the American chipmaker, which has been losing ground to Nvidia in the artificial intelligence chip market and facing challenges with its foundry business.
“This is really a vote of confidence from Masa in the turnaround we expect to see over the coming years,” said Rolf Bulk, an analyst at New Street Research. He added that SoftBank’s investment increases the likelihood of it becoming a client of Intel in the future.
Tan and Son share a longstanding relationship. Tan remarked, “Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment.” Tan’s connections with SoftBank also include his role as chairman of the chip startup SambaNova, which received funding from SoftBank’s Vision Fund.
In his 2022 statement upon leaving SoftBank’s board, Tan praised Son as a brilliant visionary who benefits from the counsel and safeguards others provide.
Son, 68, is recognized for his political acumen, having appeared alongside former U.S. President Donald Trump shortly after the presidential election. He also maintains close ties with leading tech figures such as Jensen Huang, CEO of Nvidia, a company in which SoftBank holds a stake.
Recently, Tan met with Trump, who had previously called for Tan’s resignation over his connections with Chinese firms. Reports indicate that the U.S. government is negotiating to acquire a 10% stake in Intel.
Amir Anvarzadeh of Asymmetric Advisors commented, “SoftBank’s investment helps, but it is not what will move the dial for Intel. It’s more about maintaining Tan’s good relationship with Trump.”
After a period of retrenchment following some underperforming tech investments, Son is once again making high-profile moves. SoftBank is pursuing a $500 billion U.S. data center project in partnership with OpenAI, the creator of ChatGPT. The conglomerate recently bought a former Foxconn electric vehicle factory in Ohio as part of its Stargate data center initiative.
SoftBank also controls Arm, which plans to develop its own chips, and acquired chipmaker Graphcore last year. The company’s shares have surged, fueled by optimism about its AI-related investments.
Nori Chiou, investment director at White Oak Capital Partners, emphasized, “The $2-billion investment should be seen more as a strategic stake than a financial one. In the semiconductor manufacturing sector, only capital commitments in the $30 billion to $40 billion range carry significant commercial weight.”
Despite this support, experts acknowledge the formidable challenges Tan faces in turning Intel around after years of management missteps.
Bulk of New Street Research noted, “It is Masa making a contrarian bet, but one in which the downside risk appears fairly limited.”
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
SoftBank’s $2-billion strategic investment in Intel signals a renewed confidence in the semiconductor sector, highlighting the growing importance of AI and chip manufacturing innovation. For businesses in Oman, this underscores the need to stay agile in technology adoption and explore partnerships in the tech supply chain to capitalize on emerging AI-driven opportunities. Smart investors should watch for long-term shifts in tech ecosystems and consider ventures that align with global advancements in AI and semiconductor tech.
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