According to CNBC, Qualcomm has recently approached Intel regarding a potential takeover, sparking discussions about one of the biggest tech acquisitions in recent history. Both companies declined to comment on the news.

The Qualcomm-Intel takeover would combine two of the largest players in the semiconductor industry and restructure the competitive landscape. The deal, first reported by The Wall Street Journal, could help Qualcomm strengthen its position in chip manufacturing while giving Intel much-needed support.

Intel has been facing a challenging year, with its stock dropping over 50% in 2024 alone. Once the world’s leading chipmaker, Intel has seen its dominance decline, particularly as competitors have capitalized on the growing demand for artificial intelligence (AI) chips.

Intel’s reliance on older manufacturing processes and costly and delayed attempts to innovate has left the company scrambling to maintain relevance in an industry it once dominated. A potential Qualcomm-Intel takeover comes at a critical time for the company.

Intel’s lack of competitiveness in the AI chip sector has also been a significant issue. While AI continues to drive massive revenue for other companies, Intel has fallen behind, struggling to secure a foothold in this crucial segment. The rise of AI has only deepened Intel’s woes, leaving it increasingly vulnerable to takeover attempts or demands for restructuring.

Qualcomm, known for designing chips but outsourcing production, sees the acquisition as an opportunity to expand its role in the semiconductor market. However, no formal negotiations have been confirmed, and it’s unclear whether Intel is open to the idea.

Should the Qualcomm-Intel takeover proceed, it will undoubtedly face significant regulatory scrutiny. Both companies have a substantial presence in China, and a merger of this scale could draw the attention of antitrust regulators in the U.S. and abroad.

Given the sensitive nature of the semiconductor industry and the companies’ involvement in defense and technology sectors, national security concerns could also arise.

Qualcomm is no stranger to regulatory hurdles. In 2018, it faced a failed bid to acquire NXP Semiconductors due to opposition from Chinese regulators, and any attempt to acquire Intel could face similar challenges.

Furthermore, antitrust regulators have historically been wary of allowing large tech companies to consolidate, citing concerns over competition, innovation, and consumer impact.

In addition to regulatory challenges, the deal’s complexity raises questions about execution. Qualcomm and Intel compete in several key markets, including chips for PCs and laptops, and the integration of two massive players in the industry could face operational and structural difficulties.

Still, for Qualcomm, the acquisition represents an opportunity to reinforce its chipmaking capabilities and improve its competitiveness in 5G and AI-driven industries.