Ancelotti was speaking after their friendly defeat to Benevento.
He said, “James can play in many positions behind the centre-forward. He is a Number 10 accustomed to playing behind the striker or as a winger, with the tendency to cut inside.
“I sent him a happy birthday message this week. There are negotiations in progress, it’s going to take a very long time, but we aren’t desperate or anything. If it doesn’t work out, we’ll still be a strong team and might go for a different target.
“As for the striker, a modern centre-forward can’t just be a finisher now, which is why Arkadiusz Milik is very important for us.”