Amazon Web Services (AWS), the retail giant's cloud business, is allegedly considering an investment in cloud migration company Rackspace.
The firm is valued between $5 billion and $9 billion and AWS is said to be looking to acquire a minority stake from parent company Apollo Global Management, which purchased Rackspace for $4.3 billion in 2016.
According to a Reuters report, Rackspace shares spiked hard on the news, even forcing a brief pause in trading due to volatility.
However, talks are still in the early stages and people familiar with the matter have said it is likely negotiations could take months - or even break down completely.
As the Covid-19 pandemic continues to force businesses into digital channels, public cloud spending has reached new heights.
Recent figures from IDC show global spend hit $233.4 billion last year, with PaaS and IaaS segments expanding fastest. SaaS, as the market's single biggest segment, accounted for $122bn in revenue for the year.