NXP Semiconductors is reportedly in talks to acquire AI chip developer Ambarella, according to the Financial Times, citing sources familiar with the discussions.

Following the report, Ambarella shares surged nearly 19%, while NXP shares fell more than 3%. Ambarella currently has a market value of around $3.25 billion.

A deal would strengthen NXP’s position in software-defined vehicles, edge AI, automotive radar, and robotics, as Ambarella specializes in low-power AI processors used in cameras, autonomous systems, and intelligent devices.

Neither company has confirmed the negotiations, and the report noted that discussions are ongoing and may not result in a final agreement.