Eliyan, a network interconnect startup, has received an acquisition offer and held early talks with Arm. According to Sina Finance, people familiar with the matter said the five-year-old company, valued at $1 billion in July, recently told some investors it had received a takeover proposal.

According to Sina Finance, some sources said Eliyan hired an investment bank this summer and is seeking a deal that could value it at as much as $3 billion. People familiar with the matter said Arm, an existing investor, held preliminary talks about buying Eliyan but did not make a formal bid, and a deal at that valuation level is seen as unlikely.

Eliyan was founded in 2021 and has raised more than $250 million. Its investors include AMD, Cisco, Meta, Seligman Ventures, and Tiger Global.

The company develops technology aimed at helping chipmakers address a key bottleneck in AI systems: data transfer between chiplets and between chiplets and high-bandwidth memory over traditional copper links. Eliyan said its optoelectronic approach can address some of the shortcomings of copper interconnects.

Eliyan co-founder Ramin Farjad-Rad said in a July interview that the industry is looking for alternatives to copper interconnects because copper has limited transmission distance. He said the company's optoelectronic solution retains the reliability, power, and cost advantages of copper interconnects while greatly extending transmission distance, and can be used to connect AI server racks.

Major technology companies are increasingly acquiring chip component makers to improve AI chip efficiency. In February, Broadcom held deep acquisition talks with Celestial AI, which develops optical interconnect technology, with a top offer that could reach $5.5 billion. In July, Analog Devices acquired Empower Semiconductor, whose products help AI chips manage power more efficiently.