Intel plans to raise $15 billion through its first public share sale since listing in 1971.
The funds will help the chipmaker pursue AI, foundry and other growth opportunities without taking on more debt.
Intel shares fell 4.1% after the announcement, although the stock remains up more than 160% this year.
Intel To Raise $15 Bn In First Share Sale Since 1971 As Chipmaker Ramps Up AI Push
The chipmaker plans to use the proceeds for general corporate needs, including artificial intelligence, new markets and its foundry business, as it works to strengthen its finances
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Intel is offering $15 billion worth of new shares in its first public share sale since the chipmaker went public in 1971, as it looks to strengthen its finances and invest in artificial intelligence (AI), according to a Bloomberg report.
The company said in a statement that the proceeds would be used for general corporate purposes and to pursue growth opportunities, including real-world AI applications and purpose-built chips.
Intel shares fell 4.1% to $97.52 in New York trading on Monday following the announcement. New share offerings can reduce existing shareholders’ ownership percentage because the company issues additional stock. Despite the decline, Intel shares have gained more than 160% this year, giving the company a market value of nearly $500 billion.
Intel Builds Cash For AI, Foundry Push
The share sale is expected to give Intel more financial flexibility as CEO Lip-Bu Tan focuses on strengthening the company’s balance sheet. The effort has included bringing in outside investment, including funding from the US government and chipmaker Nvidia.
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Intel is building cash reserves as it seeks a larger role in the AI industry. Demand for its general-purpose processors has benefited from the global expansion of data centres, but the company continues to compete with Nvidia and Advanced Micro Devices in AI processors.
The company also needs capital to expand its manufacturing network as it works to develop its foundry business. Intel wants to become a major outsourced chip manufacturer for other technology companies, although it is still working to secure significant outside customers.
Data Centre Growth Fuels Intel’s Recovery
Intel’s data-centre business has been a key source of growth. Sales in the segment jumped 59% in the latest quarter, more than twice the pace of the company’s overall revenue growth.
The planned share sale comes as other major technology companies are also raising large amounts of capital to fund AI-related expansion. Alphabet is seeking as much as $85 billion through equity offerings, while Oracle has plans for a $20-billion at-the-market share sale, Bloomberg reported.
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Bloomberg Intelligence analyst Robert Schiffman said the Intel offering would provide “substantial capacity” to fund AI, foundry and other projects without increasing the company’s leverage. The offering also attracted orders for several times the number of shares available, according to the news agency.