UK-based artificial intelligence firm SwiftKey is to be acquired by Microsoft, according to reports.
The Financial Times said the deal was worth $250m (£174m).
SwiftKey is known for its predictive keyboard, which can be found installed on millions of smartphone devices.
A Microsoft spokesperson refused to comment.
A spokeswoman for SwiftKey also said she would not comment on “rumours and speculation at the moment”.
The company would be the latest UK artificial intelligence (AI) firm to be bought up by a US tech giant.
DeepMind – which began within the University of Oxford – was bought by Google in 2014, for £400m. Another firm, VocalIQ, was bought recently by Apple.
As well as the popular smartphone app, SwiftKey is known for being behind the computer software on Prof Stephen Hawking’s wheelchair.
The deal would further Microsoft’s new mobile strategy, spearheaded by chief executive Satya Nadella.
Instead of focusing on hardware – where the company has a tiny share of the market with its Windows Phone range – the firm is now looking to build up a range of productivity software to be used on any kind of device.