The 20-year-old Gunners academy graduate has entered the final twelve months of his contract, and Mikel Arteta risks losing his versatile No. 7 should Arsenal fail to qualify for the Champions League this season.
Meanwhile Liverpool's Egyptian King Salah is yet to sign an extension to his current contract which now has just 18 months left to run.
And a former European Golden Shoe winner has told the Reds the young Englishman is a perfect fit to succeed Salah as a gem in their team.
Ex-Premier League striker Kevin Phillips - the only Englishman to win the prestigious European award - believes Saka could 'emulate' the Egyptian's style of play, should the forward eventually leave Anfield.
Speaking to Football Insider, he said: "I think Saka will get better and better. He's still a young kid, he's done a lot already in his short career.
"I think he's an unbelievable talent and I think, moulded in the right way, he'll turn out to be a top-class player.
"Whether he can go to Liverpool, if that was to happen, could he emulate what Salah's done? It'd be very, very difficult for any player to do that.
"But he's certainly got the attributes and qualities that he possibly could join Liverpool and replace Salah. Let's not forget, Salah didn't tear it up early on at Chelsea.
"For Saka, he's developing all the time".
Saka has bagged seven goals this season for the misfiring Gunners, leaving him just two behind the club's top scorer Emile Smith Rowe, and has played a key part in igniting Arsenal's season.
According to reports, Liverpool are joined by Pep Guardiola's Manchester City in their interest for the England international.