Intel raises $15 billion in equity offering to fund AI manufacturing expansion
The underwritten public offering, managed by JPMorgan Securities and Goldman Sachs, aims to support capital expenditures and working capital while preserving Intel’s investment-grade credit rating.
Intel has announced a $15 billion underwritten public offering of common stock, a move designed to fund general corporate purposes including capital expenditures and working capital. The company aims to leverage the surge in demand for AI computing hardware, which has driven its share price to nearly triple this year. The offering reflects a strategic push to expand manufacturing capacity and meet growing orders for central processing units.
Proceeds from the sale will support Intel’s efforts to scale production, including a €5 billion ($5.7 billion) investment at its Leixlip campus in Ireland to increase data centre processor output. The company is also advancing its 14A manufacturing process, which it has pledged to bring to high-volume output by 2028. Tesla has already signed on as a customer for the 14A process through Intel’s foundry division, signalling early confidence in the firm’s contract chip production capabilities.
The financial injection follows a period of intense demand that has strained Intel’s supply chain. Chief Financial Officer David Zinsner acknowledged that customer orders for central processing units have exceeded available manufacturing capacity. This strain coincides with a 59 per cent revenue growth in Intel’s data centre unit in the most recent quarter, a rate that outpaced total revenue expansion by more than twofold.
In July, Intel raised its annual capital spending target to $20 billion from $18 billion, underscoring the scale of its expansion plans. The new equity offering is intended to allow the company to pursue these growth opportunities while maintaining its investment-grade credit rating. The transaction includes an option for underwriters to acquire up to $2.25 billion in additional shares within 30 days.
JPMorgan Securities, Goldman Sachs, Morgan Stanley, and Citigroup Global Markets are acting as joint book-running managers for the deal. Intel’s shares fell more than 3 per cent in premarket trading on Monday, likely reflecting investor concerns regarding dilution from the new offering, despite the stock reaching $101.65 earlier in the year.
