Intel Corp. (INTC) is in advanced discussions to acquire artificial intelligence chip startup SambaNova Systems Inc. for about $1.6 billion, including debt, according to people familiar with the matter.

The talks involve Palo Alto, California-based SambaNova and could result in an agreement as soon as next month, the people said. They asked not to be identified because the discussions are confidential.

The people said the negotiations are at a late stage, though the timing and terms could still change. They added that SambaNova could also decide to pursue another option.

SambaNova has signed term sheets with other potential financial investors, the people said. That could affect whether a transaction with Intel moves forward.

SambaNova was founded in 2017 by Stanford University professors. One of the founders has received a MacArthur Genius Award.

The company designs custom artificial intelligence chips. Its products are intended to compete with offerings from Nvidia Corp., according to people familiar with the business.

Intel Chief Executive Officer Lip-Bu Tan serves as chairman of SambaNova. His venture capital firm, Walden International, was among the startup’s founding investors.

Walden International led a $56 million Series A funding round for SambaNova in 2018, according to people familiar with the matter.

At a price of about $1.6 billion, the acquisition would provide Intel with an established platform to expand its artificial intelligence product lineup. The price would be below SambaNova’s prior valuation.

SambaNova was valued at $5 billion in 2021. That valuation came during a $676 million funding round led by SoftBank Group Corp.’s Vision Fund 2.

Intel shares have risen sharply since the U.S. government said in August it would take a 10% stake in the company. The stock has gained about 60% since before that announcement.

Intel shares fell 4.3% on Friday to $37.81 in New York trading. The move gave the company a market value of about $180 billion.