By Greg Roumeliotis

(Reuters) –Chipmaker Broadcom is in discussions to buy cloud service provider VMware (NYSE 🙂 Inc. This was confirmed by people who are familiar with the situation.

Sources said that negotiations between Broadcom, VMware and Microsoft are continuing and that a deal was not in the cards. It was not possible to learn the terms of the deal under consideration.

The acquisition would further diversify Broadcom’s business away from semiconductors and into enterprise software, following its $18.9 billion acquisition of CA Technologies and its $10.7 billion purchase of Symantec (NASDAQ:) Corp’s security division in the last four years.

Bloomberg News was the first to report on the transaction late Sunday evening. Broadcom, VMware and other interested parties did not respond immediately to Reuters’ request for comment. The market capitalization for VMware stood at $40.3 billion as of Friday’s close.

Michael Dell is VMware’s biggest investor with a 40% stake as a result of Dell Technologies (NYSE:) Inc having spun out VMWare to its shareholders last year, according to Refinitiv data.

Private equity firm Silver Lake, which has previously invested in Broadcom, is VMware’s second largest shareholder with a 10% stake, Refinitiv data shows.