Marvell Technology is about to complete a major strategic acquisition. The company is in advanced talks to acquire Celestial AI, a fast-growing player in photonic interconnects for data centers.
This is reported by The Information, supplemented with details from Reuters and MRVL Stock. The negotiations are said to be almost complete, and an official announcement could follow soon. The timing is striking, as Marvell is presenting its third fiscal quarter results today.
According to sources, the deal is worth several billion dollars and involves both cash and shares. Including performance-related payments, the deal could be worth more than $5 billion. Marvell and Celestial AI have not yet responded to requests for comment.
Celestial develops crucial technology
Celestial AI develops photonic technology that allows data flows in AI systems to move significantly faster than through traditional copper connections. The company uses light to enable chips to communicate with each other. This approach is well-suited to the explosive growth and complexity of modern AI models.
The current generation of AI workloads regularly encounters the limitations of electrical interconnects, especially as computing clusters are scaled up. Photonics is therefore seen as a crucial technology for making future data centers more efficient.
For Marvell, the acquisition could yield several strategic advantages. By bringing photonic technology in-house, the company becomes less dependent on third parties and gains more control over the development of combined electrical and optical solutions. Marvell already supplies network chips, high-speed I/O such as SerDes, and switching solutions to major cloud providers. By adding photonic interconnects, the company can further integrate its portfolio and become more attractive to customers seeking faster, more energy-efficient AI infrastructure.
Combination of electrical and optical traffic
In addition, Celestial AI’s technology enables faster product launches and broader service to existing customers. Major cloud players that already rely on Marvell for network components could switch to a fully integrated stack that seamlessly combines electrical and optical traffic.
Celestial AI raised $250 million in venture capital earlier this year, bringing its total funding to $515 million. AMD’s investment division backs the startup and has Intel CEO Lip-Bu Tan on its board of directors, further underscoring the company’s strategic value.