Softbank is circling Graphcore, the troubled British semiconductor startup which once reached a valuation of £2.3 billion.
A sales process for the microchip firm was launched back in February after it struggled to find a sustainable route into the AI industry.
New funding would help offset the heavy losses suffered by Graphcore over recent years and keep the company in a position to remain in operation.
Softbank is believed to have begun discussions with the tech group a few months ago, but the talks have entered an advanced stage in recent days, reports revealed.
Some stakeholders in Graphcore have marked up the valuation of their shares in recent months, indicating that a new deal could see the company valued at around £400 million.
A buyer would also need to find a way to grow demand at the company, with it having experienced a 46% decline in revenues last year despite interest in the microchip industry booming.