Marvell Technology has announced plans to acquire optical interconnect startup Celestial AI in a deal valued at a minimum of $3.25 billion in cash and stock, rising to as much as $5.5 billion if performance milestones are met. The acquisition marks one of Marvell’s boldest moves yet, aimed at expanding its semiconductor networking portfolio and capturing a larger share of the booming AI infrastructure market.
Celestial AI develops advanced optical interconnect solutions, branded as a “photonic fabric,” that enable high-performance computers to connect multiple chips at ultra-high speeds. As next-generation AI systems increasingly rely on optical links—capable of transferring massive amounts of data faster and over longer distances compared to copper wires—the technology has become critical to scaling large language model training and inference.
The deal comes at a pivotal moment for Marvell, whose stock has dropped 18% in 2025 even as competitors like Broadcom surged on AI optimism. Following the announcement and strong Q3 earnings, Marvell’s shares rose 13% in extended trading. The company reported $2.08 billion in revenue, beating expectations, and forecasts Q4 revenue of $2.2 billion.
Marvell CEO Matt Murphy said the acquisition enhances the company’s leadership in AI connectivity and broadens its addressable market. The integration of Celestial’s optical technology will initially support large XPU-based systems—custom AI chips developed by hyperscalers—and could later be embedded directly into custom silicon and AI switches.
If Celestial achieves $2 billion in revenue by fiscal 2029, the full payout will be triggered. The deal is expected to close early next year.
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