Dell is reportedly planning to go private and is in buyout discussions with two private equity firms TPG and Silver Lake. The PC and server maker lost almost a third of its value last year.
Dell, which has a market value of close to US$19bn, is understood to have approached several large banks. The deal process is being managed by JP Morgan Chase & Co.
The decision marks a shift in the fortunes of the tech industry and a realisation that computing is no longer solely about personal computers but increasingly smartphones and tablets.
The kingmakers in this new era are increasingly Apple and Google and decreasingly Microsoft and companies like Dell.
Last week, IDC reported that declines in the PC market in the traditionally lucrative Q4 sales season were worse than expected. Some 89.8m personal computers were shipped during the quarter, down almost 7pc and worse than the 4.4pc originally forecast.
However, while consumers flock to smart devices, firms like Dell and Microsoft still hold trump cards in areas like cloud computing and virtualisation.
The ability to become a private company will enable Dell to engineer its return to growth and cope with competition without quarter-by-quarter scrutiny.
Michael Dell (47) founded Dell in a University of Texas dorm room in 1984 with a US$1,000 loan from his parents.
Shares in the company jumped 13pc to close at US$12.29 on news of the potential buyout.