The chipmaker Qualcomm has recently held talks with its troubled competitor Intel about a possible acquisition. This was reported by two people familiar with the matter. Although there is no official offer yet, such a deal could become the largest technology deal in history.

A complete acquisition of Intel would overshadow Microsoft’s $69 billion takeover of Activision Blizzard. Intel’s market value stood at $93 billion last Friday, after the company's stock price rose by eight percent following initial reports of Qualcomm's approach.

Intel, once the world's largest chip manufacturer, has lost significant ground in recent years. The depreciation accelerated dramatically in recent months. In August alone, following disappointing quarterly results and CEO Pat Gelsinger's announcement to cut 15,000 jobs and suspend dividend payments, the company lost nearly $30 billion in market value.

Despite its weakened state, individuals familiar with the situation have stated that Intel has concerns about antitrust hurdles that could potentially halt such an acquisition. Qualcomm would be interested in a friendly takeover, according to an insider. Both companies are being advised by leading investment banks: Intel is working with Goldman Sachs and Morgan Stanley, while Qualcomm has hired Evercore.

Qualcomm, which has its chips manufactured externally and does not operate its own production facilities, has a market capitalization of 188 billion US dollars. However, it remains unclear how the company would finance a complete takeover of Intel or if it would need to sell parts of Intel to make the deal happen.

Apart from the regulatory challenges, a potential deal will also be closely scrutinized due to national security concerns and its impact on the global chip market. Both companies are likely to position the deal as a strategic step to strengthen the US chip industry in competition with Chinese manufacturers, according to insiders. Nonetheless, there is concern that the lengthy acquisition process could cause chip developers to fall further behind in the international race.

Intel has been under significant pressure since the appointment of CEO Pat Gelsinger in 2021. His five-year strategy aims to re-establish the company as a leading chip manufacturer. However, Intel faces numerous challenges, including the loss of senior executives and lagging behind competitors like Nvidia and AMD in the development of AI chips.

A sale to Qualcomm could meet resistance from Intel shareholders. Citi analysts argued in a recently published note that Intel should instead abandon its semiconductor business. The idea of a takeover is "almost too absurd to address," they wrote.