PLEASANTON, Calif. — Private equity firm Silver Lake is negotiating a potential acquisition of Workday, in a deal that could become one of the biggest software takeovers ever announced.

The talks have been ongoing for several months, according to people familiar with the discussions. No final agreement has been reached, and the negotiations could still end without a transaction.

Workday's shares jumped nearly 18% on Thursday after news of the talks emerged. The company's market value increased from roughly $43 billion to about $51.1 billion based on Thursday's closing price.

Silver Lake could bring additional investors into the transaction to help finance a deal of this size.

The potential acquisition comes at a challenging time for traditional software companies. Rapid advances in artificial intelligence have raised questions about the long-term value and growth prospects of established enterprise software businesses.

Workday provides cloud software covering human resources, payroll, finance, spending and business planning, serving more than 11,500 customers worldwide.

The company reported $9.6 billion in fiscal 2025 revenue, up 13%, while operating cash flow reached $2.9 billion. However, its revenue growth has slowed from the previous year.

If completed, the transaction would become a major test of whether private-equity firms are willing to make enormous bets on traditional software businesses as AI transforms the technology sector.