Qualcomm recently approached Intel to explore a potential acquisition of the troubled chipmaker, a source familiar with the situation said, in what could be a transformational deal in the sector but faces many hurdles.

Qualcomm is a popular figure in the smartphone industry, thanks primarily to its Snapdragon series of chipsets that power both midrange and flagship phones. The company's reach ex

Intel's shares reversed course to rise 8%, while Qualcomm fell 4% in afternoon trade. Intel has been attempting to turn its business around by focusing on its chip foundry unit and artificial intelligence processors,

Qualcomm did not immediately respond to a Reuters request for comment. The approach by Qualcomm comes at a moment of weakness for Intel, which was once the most valuable chipmaker in the world, but whose shares have lost nearly 60 per cent of their value since the start of the year.

The conversations with Intel are at an early stage. The San Diego-based company has not made a formal offer for Intel, according to third person familiar with the matter. The sources requested anonymity as the discussions are confidential. Intel declined to comment. Qualcomm did not immediately respond to a request for comment.

Qualcomm Inc. has approached Intel Corp. to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever M&A deals.

It’s conceivable that CEO Cristiano Amon imagines some grand alliance with Intel to really challenge Nvidia in AI or sees the possibility of throwing Intel a financial lifeline or simply, he thinks its stock is too cheap.