As SoftBank recently made a massive $3 billion bet on itself, they’ve now just decided to give Intel the “it’s not me, it’s you” speech. In short, Softbank (Japan’s tech giant), has decided to abandon its collaboration with Intel to create an artificial intelligence (AI) chip aimed at competing with Nvidia. Translation: Intel can’t catch a friggin break. 

(Source: Giphy) 

This decision, as reported by the Financial Times, stems from Intel's inability to meet the stringent requirements set forth by SoftBank regarding production volume and speed. This failure has prompted SoftBank to explore a new shiny object in America’s favorite foreign exchange friend, Taiwan Semiconductor's (TSMC). No shocker there obvi, but in layman's terms: Intel just couldn’t keep up with Softbank’s need for speed (and chips). 

(Source: Financial Times) 

This also comes after SoftBank, led by Willy Wonka of tech, Masayoshi Son, has long harbored aspirations to establish a foothold in the AI chip market. The vision, according to Son, included not only chip production but also the development of software and powering data centers.

(Source: Silicon Angle) 

Simply put, with the recent surge in demand for AI capabilities, highlighted by Nvidia's meteoric rise while becoming Wall Street Bets favorite blue chip stonk, SoftBank's interest in this domain is largely induced by the massive FOMO opportunity AI presents

(Source: Yahoo Finance) 

However, on the other hand, this comes at a time when Intel is being slapped left, right, and twice on Sunday with its own challenges. Reports indicate that Intel, bless their hearts, have been undergoing a drastic restructuring, which includes significant layoffs (which we’ve mentioned here) and a focus on cost-cutting measures. 

(Source: Yahoo Finance) 

So clearly, Softbank saw the writing on the wall, unlike Intel when they had the opportunity to get in bed with Sam “Weird Al”-tman. Plus, with a series of operational losses, including a staggering $7 billion loss in its foundry unit earlier this year - Intel is definitely about as stable as a crack heads last tooth (I know I’ve said that before, but coming from a family with crackheads in the mix, it’s still hilarious to say). 

(Source: Reuters) 

Now with that said, though, this wasn’t as clean of a cut as Softbank makes it out to be. The frustration with Intel is real af, as the Japanese tech giant had anticipated leveraging the partnership with Intel to capitalize on incentives provided by the Biden Administration's Chips Act, (See: a nice $20 billion stimmy for beating China in the tech race). 

 

(Source: Giphy) 

However, now that Intel looks to be failing on its promises, it’s easy to see why SoftBank is now shifting its focus to TSMC, the Beyonce of chip manufacturing - while also dipping its Wagyu loving fingers in hopes of future Google and Meta partnerships. But still, as Softbank leverages TSMC, while also having Britain’s version of Nvidia, Arm Holdings (whom Intel just sold its stake in lmao), in their arsenal, they’ve definitely garnered some momentum that Intel lacked to give. 

(Source: Reuters) 

So with that said, what’s the takeaway here for investors? 

Well, unfortunately, this just adds to the utter demise of Intels story these days. With the stock down -56.77% YTD, investors are not only up a creek without a paddle, but they are now pulling their own Softbank adjustments in whether there's a future outside of the PC market for Intel or not. 

(Source: Business Post) 

On the other hand though, Softbank, and Taiwan Semiconductors, are both being strategic and showing investors they are willing to adapt to whatever the hell the market gives them (again, unlike Intel). 

(Source: Fudzilla)

Now obviously do what you will with this information, but clearly the AI train is still chugging with Taiwan Semiconductors being one of the main cornerstones of its growth. And while Softbank is trading in the U.S. OTC markets, it might not be a bad idea to ponder that Japanese wonder as well. In the meantime though, my condolences go out to all you Intel investors with another massive “L” in the column. Things will get better I promise…

(Source: Giphy) 

In fact, I’m told CEO swaps these days have had a massive boost in stock prices, and with Pat Gelsinger struggling to hold up his end of the bargain, we may end up seeing another changing of the guard sometime soon… (Looking at you, Elliott Management). 

(Source: Giphy) 

Stocks.News holds positions in Meta, Google, and Intel as mentioned in the article.