(Reuters) – Qualcomm Inc has made a $300 billion takeover bid for chipmaker Intel Corp in recent days, the Wall Street Journal reported on Friday, citing people familiar with the matter.
Intel shares closed up 3.3%, while Qualcomm (NASDAQ:) shares fell 2.9%. Qualcomm has a market cap of $188 billion, roughly double Intel’s.
The acquisition would put Qualcomm, best known for its mobile chips, in charge of a Silicon Valley stalwart that created the core of modern personal computers but has struggled to pivot to chips that power artificial intelligence.
Earlier this month, Reuters reported that Qualcomm had explored the possibility of acquiring parts of Intel’s design business and that its personal computer design unit was of particular interest.
Intel is trying to transform its business by focusing on AI processors and creating a contract chip manufacturing business, known as a foundry.
Once the dominant force in the chip industry, Intel has in recent years ceded its manufacturing lead to its Taiwanese rival, and missed out on the generative AI boom that Nvidia (NASDAQ:) and AMD (NASDAQ:) have been exploiting. Among the company’s mistakes was abandoning an investment in OpenAI, the owner of ChatGPT.
Intel shares have fallen 25% since Aug. 1, when it said it would cut more than 15% of its workforce and suspend its dividend as it seeks to turn around.
While Qualcomm and Intel are both major chipmakers in the United States, their business models differ significantly. Qualcomm designs chips using intellectual property licensed from arm Holding (NASDAQ:), and outsources its manufacturing.
Intel relies mostly on its own architecture and is among a minority of U.S. chipmakers that make their chips in-house.
Intel declined to comment, while Qualcomm did not immediately respond to a Reuters request for comment.
The Wall Street Journal report said that the deal between Qualcomm and Intel is far from certain, adding that even if Intel was receptive to an offer from Qualcomm, a deal of this size would attract scrutiny from antitrust authorities.
To complete the deal, Qualcomm may intend to sell assets or parts of Intel to other buyers, according to the report.
Analysts and investors said Intel was likely to be removed from the index.
Intel shares have fallen 56% this year, making it the worst performer on the index and leaving it with the lowest share price on the price-weighted Dow Jones Index.
Intel has signed Amazon.com Inc.’s (NASDAQ:) cloud computing unit as a customer to manufacture custom artificial intelligence chips, providing some relief to nervous investors.