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Intel (INTC) - Get Intel Corporation Report is in advanced talks to acquire Habana Labs, an Israel-based chip developer, for $1 billion to $2 billion, the Israeli publication Calcalist said Tuesday.

Intel shares were off 1.8% to $56.60.

Calcalist cited a person familiar with the matter. If the acquisition goes through, Calcalist said, it will be Intel's second-largest acquisition of an Israeli company, following its $15.3 billion acquisition of automotive-chip maker Mobileye in 2017.

Habana Labs, which was founded in 2016 and employs about 150 people, develops processors optimized for artificial-intelligence applications. Habana has locations in Tel Aviv; San Jose, Calif., Beijing and Gdansk, Poland.

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The startup was founded by David Dahan and Ran Halutz, both former executives at PrimeSense, which Apple (AAPL) - Get Apple Inc. Report acquired for $360 million in 2013, Calcalist said.

Habana had raised $120 million, $75 million of it in a November 2018 round led by Intel Capital. Other investors include WRV Capital, Bessemer Venture Partners and Battery Ventures.

Habana Labs' first investor and its chairman is the Israeli tech entrepreneur Avigdor Willenz, who was one of the founders of Galileo Technologies, sold in 2001 to Marvell Technology (MRVL) - Get Marvell Technology Inc. Report for $2.7 billion. He also co-founded Annapurna Labs, sold to Amazon (AMZN) - Get Inc. Report for $370 million in 2015.

Among its products is Goya, a line of processors for artificial intelligence applications. In June, the company announced Gaudi, an AI training processor, which the company said "will deliver an increase in throughput of up to four times over systems built with equivalent number GPUs."

Intel employs 12,000 people in Israel directly and another 1,100 through Mobileye. A number of its local employees are based in its Haifa research and development center, where the Santa Clara, Calif., parent develops many of its key chips.

Intel declined to comment. Habana did not respond to a request for comment.