A source close to Qualcomm indicated that the company is only interested in pursuing a friendly agreement, while those familiar with Intel's perspective expressed concerns that antitrust regulators might hinder any potential deal.
If completed, a full acquisition of Intel would surpass Microsoft's $69 billion purchase of Activision, making it the largest technology transaction in history.
As of Friday, Intel's market capitalization stood at $93 billion, following an 8 percent increase in its share price after The Wall Street Journal first reported Qualcomm's interest.
Once the leading chipmaker globally, Intel has experienced a significant decline in recent years, which has intensified in recent months.
The company saw a nearly $30 billion drop in market value in August after a disappointing earnings report, during which CEO Pat Gelsinger announced the elimination of 15,000 jobs and the suspension of its dividend.
Since the beginning of the year, Intel's share price has plummeted by 50 percent, prompting the company to be cautious about potential bids and the risk posed by activist shareholders.
Intel is currently collaborating with Goldman Sachs and Morgan Stanley to assess Qualcomm's overture. For several months, Morgan Stanley has been advising Intel on strategies to protect itself from activist investors, a move previously reported by CNBC.
Additionally, Intel is contemplating a variety of asset sales, according to sources familiar with the company's strategy.
Qualcomm's interest in a complete acquisition of Intel emerged after it initially considered acquiring several of Intel's assets, corroborating an earlier report by Reuters.
Qualcomm, in contrast to Intel, does not manufacture its own chips but relies on external manufacturers for production. With a market capitalization of $188 billion, Qualcomm is collaborating with investment bank Evercore to assess its strategy regarding Intel.
The specifics of how Qualcomm would finance a complete acquisition of Intel remain uncertain, as does the possibility of divesting certain assets during the process. Any potential deal is expected to encounter significant antitrust scrutiny and political issues related to national security.
If the acquisition proceeds, it would be presented to U.S. regulators as an effort to bolster American chipmakers in their competition against Chinese firms, according to sources familiar with the situation. However, these sources also warned that a protracted acquisition process could hinder the chipmakers' ability to keep pace with international competitors, a factor that might jeopardize the deal.
Intel and Goldman Sachs have refrained from commenting, while Morgan Stanley, Evercore, and Qualcomm have not responded to inquiries for comment.
This situation intensifies the pressure on Gelsinger, who has been at the helm since 2021 and is currently three years into a five-year plan aimed at transforming Intel into a competitive chip manufacturer alongside industry leader Taiwan Semiconductor Manufacturing Company. The company has faced numerous challenges, including the departure of notable executives like industry veteran Lip-Bu Tan from its board. Additionally, Intel has fallen behind competitors Nvidia and AMD in the sales of artificial intelligence chips for data centers.
Analysts at Citi suggested in a note released on Friday that Intel shareholders would likely oppose a sale to Qualcomm. They recommended that Intel consider exiting its semiconductor manufacturing operations, arguing that the company has minimal prospects of becoming a profitable leading-edge foundry. They described the takeover discussions as "almost too silly to comment on."