Qualcomm recently contacted Intel about a possible acquisition

Qualcomm recently contacted troubled chip manufacturer Intel about a takeover, CNBC confirmed.

It is not clear whether Intel has held talks with Qualcomm and what the terms are, said a person familiar with the matter, who asked not to be identified due to the confidentiality of the information.

The Wall Street Journal was the first to report on the matter. Intel shares initially rose, but then fell back to around Friday's closing price.

If the deal goes ahead, it would be one of the largest technology mergers of all time. Intel has a market capitalization of over $90 billion.

Intel, once the world's largest chipmaker, has been on a downward spiral for years that accelerated in 2024. The stock saw its biggest one-day loss in over 50 years in August after the company reported disappointing earnings. Intel shares have fallen 53% this year as investors raise doubts about the company's costly chip manufacturing and development plans.

Qualcomm and Intel compete in several markets, including PC and laptop chips. However, unlike Intel, Qualcomm does not manufacture its chips itself, but relies on companies such as Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung for production.

On Monday, after a board meeting to discuss strategy, Intel CEO Patrick Gelsinger sent a memo to employees reiterating the company's intention to invest heavily in its foundry business, a project that could cost $100 billion over the next five years. The company also said it was considering outside investment.

Intel has also missed the artificial intelligence boom that has caught Wall Street's attention. Most advanced AI programs, such as ChatGPT, run on Nvidia graphics processors rather than Intel central processors. Analysts say Nvidia holds over 80% of the fast-growing market.

Qualcomm generates less revenue than Intel. In fiscal 2023, the company reported revenue of $35.8 billion, while Intel generated $54.2 billion in the same period.

A potential deal would be complicated by antitrust and national security issues. Both Intel and Qualcomm operate in China, and both companies have seen deals with Chinese antitrust authorities fall through in the past. Intel was unsuccessful in its attempt to acquire Tower Semiconductor, as was Qualcomm in its attempt to acquire NXP Semiconductor.

Other major acquisitions in this area were also canceled. In 2017 Broadcom made an offer to buy Qualcomm for over $100 billion. The Trump administration blocked the deal the following year over national security concerns because Broadcom was based in Singapore at the time. And in 2021, the FTC filed suit to block Nvidia's attempted purchase of Arm on antitrust grounds. The deal was called off in 2022 after additional pressure from regulators in Europe and Asia.

Representatives from Qualcomm and Intel declined to comment.