Apollo Global Management Inc (APO.US) plans to invest several billion dollars in Intel Corporation (INTC.US).

According to informed sources, Apollo Global Management Inc (APO.US) has proposed to invest billions of dollars in Intel Corporation (INTC.US). This move would be a vote of confidence in the chip manufacturer's turnaround strategy. One of the sources stated that Apollo Global Management Inc recently suggested it was willing to make a equity investment of up to $5 billion in Intel Corporation. The sources mentioned that Intel Corporation executives have been evaluating the proposal from this alternative asset management company. The sources also added that nothing has been finalized yet, the potential investment size may change, and negotiations could break down, leading to no agreement being reached in the end. It is worth mentioning that the two companies have already established a partnership. In June, Intel Corporation agreed to sell its ownership in a joint venture factory in Ireland to Apollo Global Management Inc for $11 billion, bringing in more external funds for its large-scale expansion of factory networks. Poor performance causing concerns In early August, Intel Corporation's financial report showed a 1% year-on-year decrease in sales to $12.8 billion in the second quarter, below analysts' expectations of $12.95 billion; adjusted earnings per share were $0.02, below analysts' expectations of $0.10. In addition, the company forecasts sales for the third quarter to be between $12.5 billion and $13.5 billion, well below analysts' expectations of $14.38 billion; expected adjusted earnings per share are a loss of $0.03, while analysts expected earnings of $0.30 per share. Intel Corporation also announced plans to lay off over 15,000 people and suspended dividends that had been in place since 1992. The company aims to advance its operational transformation with this, reversing the long-term losses in its chip manufacturing business. CEO Pat Gelsinger stated that the company plans to reduce spending by $10 billion by 2025, therefore "adjusting the cost structure to fit the new operational mode." This performance highlights the challenges Intel Corporation faces in striving to achieve ambitious transformation and competing in the era of artificial intelligence. Investors in Intel Corporation have lost patience with the company's turnaround plan, involving significant investments in new chips and production technologies while Intel Corporation is attempting to do so amidst declining revenue. Furthermore, Intel Corporation's current products are not what those investing in AI infrastructure want, meaning that Intel Corporation is losing market share. The poor performance has caused Intel Corporation's stock price to plummet, resulting in the company's market value evaporating by billions of dollars and shattering the last trace of confidence in Pat Gelsinger's turnaround plan initiated when he took over as CEO of Intel Corporation in 2021. While Apollo Global Management Inc is mostly known today for its insurance, acquisition, and credit strategies, the company began as a distressed asset investment expert in the 1990s. Is Intel Corporation being acquired? Reportedly, Qualcomm (QCOM.US) has recently made contact with Intel Corporation and is in talks with the latter regarding a potential acquisition. However, it is currently unclear what Intel Corporation's response is and the terms or offers of the acquisition. Sources suggest that Qualcomm executives are highly interested in Intel Corporation's client PC design business but are considering all of the company's design departments. Intel Corporation is currently working to generate cash and seeking to divest business units and sell off other assets. If the acquisition is successful, it would be one of the largest in tech history. Of course, such a massive acquisition comes with significant uncertainty, even if both parties are interested, as it would have to undergo rigorous antitrust scrutiny. Intel Corporation(INTC.US) welcomes multiple positive developments For Intel Corporation, which is currently facing financial difficulties, improving capital efficiency and reducing financial burdens are undoubtedly top priorities. A statement released last week shows that Intel Corporation will be producing custom AI chips for Amazon.com, Inc. (AMZN.US), and the two companies have reached a multi-year collaboration framework on products and wafers. Intel Corporation and Amazon.com, Inc.'s cloud services division AWS will jointly invest in custom semiconductors for AI computing, relying on Intel Corporation's 18A process, an advanced chip manufacturing technology. Furthermore, Intel Corporation will establish Intel Corporation Foundry Services as a standalone business unit. To attract more customers, Intel Corporation plans to separate the foundry business (IFS) from its other operations as a wholly-owned subsidiary. This move aims to show potential clients that IFS is an independent supplier, especially for companies competing with Intel Corporation, to work with them more confidently. Intel Corporation also stated that it is eligible to receive up to $3 billion in funding from the U.S. government for manufacturing chips for the military.Intel Corporation has also postponed the construction of new factories in Germany and Poland, but is still committed to expansion in the states of Arizona, New Mexico, Oregon, and Ohio in the United States; the construction projects in Poland and Germany will be put on hold for approximately 2 years based on market demand. Intel Corporation has stated that another factory in Malaysia will be completed, but will only be operational if the conditions support it."Bonjour, comment a va?" "Hello, how are you?"