(Bloomberg) — Apollo Global Management Inc. has offered to make a multibillion-dollar investment in Intel Corp., people familiar with the matter said, providing the chipmaker with a vote of confidence in its turnaround strategy and an alternative to a potential takeover by larger rival Qualcomm Inc.

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The alternative asset manager has indicated in recent days that it would be willing to make an equity-like investment in Intel of as much as $5 billion, one of the people said, asking not to be identified discussing confidential information.

The development comes after San Diego-based Qualcomm floated a friendly takeover of Intel, which has been working to reinvent itself amid the most difficult period in its 56-year history. Qualcomm’s move has raised the prospect of one of the biggest-ever M&A deals, as well as other bidders entering the fray. Broadcom Inc., at least for now, is on the sidelines.

Intel’s shares rose as much as 4.2% in early trading on Monday. The stock was up 2.7% at 9:43 a.m. in New York, giving the company a market value of about $96 billion.

Intel executives have been weighing Apollo’s proposal, according to the people. The size of Apollo’s potential investment could change or discussions could fall apart, they said. Representatives for Apollo and Santa Clara, California-based Intel declined to comment.

While Apollo may be best known today for its insurance, buyout and credit strategies, the firm started out in the 1990s as a distressed-investing specialist. The firm also has an existing relationship with Intel, which in June agreed to sell to Apollo a stake in a joint venture that controls a chip plant in Ireland for $11 billion, bringing in more external funding for a massive expansion of its factory network.

Under Chief Executive Officer Pat Gelsinger, Intel has been working on an expensive plan to remake itself and bring in new products, technology and outside customers. Still, the company is headed for its third consecutive year of shrinking sales and its shares have lost more than 50% of their value this year.

Intel’s shares did get a bounce last week after Gelsinger made a series of announcements signaling the beginnings of a turnaround. Those included a multibillion-dollar deal with Amazon.com Inc.’s Amazon Web Services cloud unit to co-invest in a custom AI semiconductor and a plan to turn its ailing manufacturing business into a wholly owned subsidiary. Intel also said it would pull back on some projects, including shelving plans for new factories in Germany and Poland for now.

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Gelsinger believes the turnaround plan could be sufficient for Intel to remain an independent company but is open to considering the merits of different transactions, people familiar with the matter said on Saturday. Broadcom isn’t currently evaluating an offer for Intel, the people said, having previously assessed whether to pursue a deal.

A combination of Intel with a larger competitor would almost certainly draw intense scrutiny from antitrust regulators around the world, as chips are now integral to the digital framework supporting everyday life — from smartphones and computers, to washing machines and electric vehicles.

A Qualcomm-Intel deal would face multiple hurdles, Bloomberg Intelligence analysts Kunjan Sobhani and Oscar Hernandez Tejada wrote in a note.

“The deal faces significant regulatory, financial and execution challenges,” they wrote. “With only $13 billion in cash on hand, Qualcomm would likely need additional investors and asset divestitures to make the purchase feasible. The deal’s strategic fit could also raise concerns.”

Apollo has other experience in the chipmaking space. Last year, the New York-based firm agreed to lead a $900 million investment in Western Digital Corp., buying convertible preferred stock.

–With assistance from Dinesh Nair, Michelle F. Davis, Shadab Nazmi and Yasufumi Saito.

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