Qualcomm has in recent days approached Intel to explore a potential acquisition of the troubled chip maker, a source familiar with the situation said on Friday, in what could be a transformational deal in the sector but faces many hurdles.

Qualcomm CEO Cristiano Amon is personally involved in the negotiations to acquire five-decade-old Intel, according to the source who was briefed on the matter. Another person familiar with the situation said Amon has been actively examining various options for a deal for the company.

Earlier this month, Reuters reported that Qualcomm explored the possibility of acquiring portions of Intel’s design business and that its PC design unit was of particular interest. Qualcomm executives were examining Intel’s entire portfolio of businesses.

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.

Intel’s shares closed up 3.3%, while Qualcomm fell 2.9%.

The approach by Qualcomm comes at a moment of weakness for Intel, which was once the most valuable chip maker in the world, but whose shares have lost nearly 60% of their value since the start of the year.

A deal, should it go ahead, would likely invite scrutiny from antitrust regulators in the US, China and Europe. Qualcomm may be required to divest parts of Intel in order to gain regulatory approvals.

Biggest since Broadcom

A bid would mark the biggest takeover attempt in the technology industry since Broadcom sought to buy Qualcomm for $142 billion in 2018, before President Donald Trump nixed the tie-up, citing national security risks.

Reuters could not determine how Qualcomm, which has a market value of US$188-billion, would finance a bid for Intel, which is valued at $122-billion, including its debt. Qualcomm has roughly $13-billion in cash, according to recent company filings.

It is also unclear how Qualcomm would handle the takeover of Intel’s contract manufacturing business. To build chips with an atomic level of precision, Intel has invested hundreds of billions of dollars over decades on its fabrication process and amassed tens of thousands of engineers to do it.

Read: Intel could soon be kicked off the Dow Jones

Qualcomm has never operated a chip factory, or fab, and currently contracts the likes of Taiwan’s TSMC and uses designs and other technology supplied by ARM Holdings.

Once the dominant force in chip-making, Intel ceded its manufacturing edge to TSMC and failed to produce a widely desired chip for the generative AI boom capitalised on by Nvidia and AMD.

Intel has been attempting to turn its business around by focusing on AI processors and creating a chip contract manufacturing business, known as a foundry.

As part of a memo from CEO Pat Gelsinger, Intel released a series of announcements that stemmed from a board meeting last week. Gelsinger and other executives presented a plan to shave off businesses and restructure the company, Reuters has previously reported.

The company plans to pause construction on factories in Poland and Germany, and reduce its real estate holdings. Intel also said it had reached a deal to make a custom networking chip for Amazon Web Services.