AOL Time Warner and AT&T refused to comment on the news.
The reports were sparked by comments made by media magnate John Malone, chairman of Liberty Media, and also one of AT&T's biggest investors. Malone would benefit from trying to prompt an auction of the business.
A deal between AOL Time Warner and AT&T could see the companies being combined and spun off. This would allay regulatory concerns about AOL's internet service having an unfair advantage over rivals, because of its close link to Time Warner's high-speed cable network.
However, an AOL Time Warner and AT&T deal would face stiff opposition from Disney, which wants to prevent the internet and media goliath getting its hands on the AT&T network. AT&T has already turned down an offer from US cable company Comcast.
Disney is said to be trying to whip up support from companies such as Microsoft to combat the deal.
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