The 21-year-old Caicedo has also been heavily linked to a transfer to Chelsea this month, but the Blues have had two offers for him rejected after the Seagulls said their star player was not for sale.
Arsenal reportedly expressed interest in the Ecuadorian international earlier this week, and they have since moved to sign him.
The bid was immediately turned down, however, since Brighton’s policy on not selling Caicedo won’t alter.
Due to a lack of depth in the midfield, Arsenal is eager to add a fresh player to prevent their championship run from being disrupted.
Granit Xhaka and Thomas Partey have excelled this season, while Albert Sambi Lokonga has deceived and Mohamed Elneny is expected to miss some time with a knee injury he sustained in training.