Intel will sell $15 billion in shares to support demand for AI. The market responded with a sell-off.

Intel announced that it will issue $15 billion in common stock. The chipmaker cited strong customer demand, “driven by unprecedented investments in AI computing.” Following this announcement, the company’s stock price fell 4.6% in premarket trading.

Intel will use the funds raised for general corporate purposes, including capital expenditures and working capital, according to the company's statement.

"Progress in promising areas such as physical artificial intelligence, specialized chips, advanced manufacturing technologies, and the production of semiconductors for external customers opens up significant growth potential," the statement said.

The funds will give Intel “significant opportunities” to finance projects in AI, contract manufacturing, and other areas—without increasing its debt burden, wrote Bloomberg Intelligence analyst Robert Schiffman.

Shares of Intel, which is working to turn its business around, have risen 175% since the start of the year. Although the company does not hold a leading position in the market for specialized AI chips, demand from data centers has driven growth in sales of its central processing units (CPUs), Bloomberg notes. Revenue in this segment jumped 59% last quarter, more than doubling the growth rate of the company’s total revenue.

When presenting its earnings report, Intel simultaneously raised its capital expenditure forecast for the current year—from $18 billion to more than $20 billion. And next year, these expenditures will be “significantly higher” than this year’s levels, top management said, attributing the increase to confidence in future sales, according to The Wall Street Journal.

Intel is ramping up its investments amid a massive race for AI computing power. In recent years, tech giants have poured trillions of dollars into building the necessary infrastructure, and during this earnings season, several major players have once again raised their capital expenditure plans due to high demand for AI. According to Goldman Sachs, their combined spending could reach $765 billion this year and $1.2 trillion next year, CNBC reports.

This article was AI-translated and verified by a human editor