SANTA CLARA, Calif. – December 3, 2025 — Marvell (NASDAQ: MRVL) today announced that it has entered into a definitive agreement to acquire Celestial AI, a pioneer in photonic interconnect technology. The strategic acquisition, valued at approximately US $3.25 billion in cash and stock, positions Marvell to lead the transition toward optical connectivity for next-generation AI and cloud data centers — marking a major step forward in the company’s scale-up connectivity roadmap.
Under the agreement, shareholders of Celestial AI will receive $1.0 billion in cash and 27.2 million shares of Marvell common stock (valued at approximately $2.25 billion based on a recent weighted average share price). An additional contingent consideration — in the form of further Marvell stock — of up to $2.25 billion may be payable if certain revenue milestones are reached by the end of fiscal 2029.
The transaction is expected to close in the first quarter of calendar year 2026, subject to customary closing conditions and regulatory approvals.
A Transformational Acquisition for Marvell
Optical Interconnect — The Next Frontier in AI Infrastructure
Celestial AI developed a breakthrough platform called Photonic Fabric — an optical interconnect technology engineered to deliver high-bandwidth, low-latency connectivity at package, system and rack level. This technology uses light-based signals instead of traditional electrical connections, enabling far greater data throughput, significantly reduced power consumption, and enhanced thermal and signal stability.
As AI workloads and cloud-scale data centers become more demanding, traditional copper-based interconnects are reaching their physical and performance limits. The Photonic Fabric from Celestial offers a solution that supports rack-scale architectures connecting numerous XPUs (accelerators), memory modules and networking switches — delivering “any-to-any” connectivity at scale. Marvell Technology, Inc.
Marvell’s CEO, Matt Murphy, said: “The acquisition of Celestial AI is a transformative step in Marvell’s evolution and expands our leadership in AI connectivity, as scale-up becomes the next frontier in AI infrastructure.” He added that combining Celestial’s photonic interconnect with Marvell’s existing data-infrastructure portfolio will create the industry’s most comprehensive connectivity platform for cloud and AI customers. Marvell Technology, Inc.
Sandeep Bharathi, President of Marvell’s Data Center Group, emphasized: “By pairing our UALink scale-up switch roadmap with Celestial AI’s optical scale-up technology, we will enable customers to build AI systems that scale beyond the limits of copper and redefine what’s possible in data-center architecture.” Marvell Technology, Inc.+1
Strategic Rationale & Market Opportunity
Meeting Explosive AI & Cloud Demand
The surge in demand for AI — from large language models to machine learning workloads — is propelling data-center architectures toward unprecedented scale. Multi-rack deployments, high-bandwidth chip-to-chip interconnects, and cross-rack memory sharing are becoming prerequisites. Optical interconnects like Celestial’s Photonic Fabric are increasingly viewed as the only scalable, power-efficient solution. Marvell’s acquisition puts it at the front of this transition.
Expanding Marvell’s Addressable Market
By integrating photonic interconnects, Marvell expands beyond its traditional semiconductor and networking chip portfolio to become a full-stack infrastructure provider — offering chips, switches, optical fabrics, and connectivity solutions under one umbrella. Market analysts estimate this could open up a $10 billion total addressable market (TAM) for optical interconnect technologies over the coming years.
Early Revenue Projections
Marvell expects meaningful financial contribution from Celestial AI starting in the second half of fiscal 2028. The company projects a US $500 million annualized revenue run rate by the fourth quarter of fiscal 2028, with potential to reach US $1 billion run rate by the fourth quarter of fiscal 2029.
These projections reflect confidence that photonic interconnects will move rapidly from experimental and niche applications into mainstream adoption — particularly within hyperscalers, cloud providers, and enterprises running large-scale AI workloads.
What This Means for Stakeholders
Cloud & Hyperscale Providers
- Performance Boost: Faster, lower-latency interconnects allow AI servers to scale across racks without compromising on bandwidth or speed.
- Energy Efficiency: Optical fabric reduces power consumption compared to traditional copper interconnects, lowering operational costs.
- Scalability: As AI model sizes grow, Photonic Fabric enables architecture designs that can scale out memory and compute across racks seamlessly.
Data-Center Operators & OEMs
- Opportunity to adopt a unified connectivity stack — combining chips, switches, optical fabric, and system integration from a single vendor (Marvell).
- Reduction in complexity — fewer interconnect standards to manage, and easier end-to-end integration for next-gen AI servers and storage systems.
Investors & Market Observers
- Marvell’s bold acquisition signals confidence in long-term structural growth of AI infrastructure demand.
- Diversified product offerings and expanded TAM may lead to improved revenue stability and growth prospects, reducing exposure to cyclical semiconductor cycles.
- Early entry into photonic interconnects positions Marvell ahead of competitors that remain focused on traditional copper-based solutions.
Transaction Details & Timeline
- Purchase Price: US $3.25 billion — comprising $1.0 billion in cash + 27.2 million Marvell shares (~$2.25 billion) based on recent VWAP. Marvell Technology, Inc.
- Earn-out Structure: Additional stock compensation (up to $2.25 billion) contingent on Celestial AI achieving revenue milestones (first milestone: $500 M cumulative by FY 2029; full earn-out if cumulative revenue exceeds $2.0 billion). Marvell Technology, Inc.
- Expected Close: Q1 2026, pending customary regulatory approvals and closing conditions. Marvell Technology, Inc.
- Integration Path: Celestial AI’s Photonic Fabric platform will be folded into Marvell’s data-center infrastructure business line, combining with Marvell’s existing connectivity, switch and silicon solutions to deliver an integrated optical stack. Marvell Technology, Inc.
About Marvell
Marvell is a leading global provider of semiconductor products and data-infrastructure solutions, designing chips and connectivity technologies that power cloud, enterprise, storage, carrier, and custom silicon markets worldwide. With decades of experience, Marvell’s portfolio includes Ethernet controllers, data-center switches, storage accelerators, networking PHYs, and more — serving customers ranging from cloud hyperscalers to telecom operators and enterprise data centers. Marvell Technology, Inc.
The addition of photonic interconnects from Celestial AI marks the latest evolution in Marvell’s strategy to deliver comprehensive, high-performance, scalable, and energy-efficient infrastructure for the AI era.
About Celestial AI
Celestial AI is a semiconductor startup specializing in photonics-based interconnect solutions designed to meet the bandwidth, latency, power, and scale demands of next-generation AI and cloud data centers. Its flagship Photonic Fabric technology enables optical I/O at the package, system and rack level — offering significant improvements in data throughput, energy efficiency, and thermal stability over traditional copper-based interconnects. Marvell Technology, Inc.+1
Celestial’s photonic chiplets — offering up to 16 terabits per second of bandwidth per chiplet — are designed for co-packaging with high-performance XPUs (AI accelerators) and network switches, enabling integrated, scalable optical connectivity within and across racks. Marvell Technology, Inc.
Forward-Looking Statement & Industry Outlook
As AI workloads and cloud computing demand continue to escalate, traditional data-center interconnects — constrained by copper interconnect limitations in bandwidth, latency, power, and reach — are becoming bottlenecks. The acquisition of Celestial AI enables Marvell to address this challenge head-on by offering optical interconnect solutions that scale from chip-to-chip to rack-wide architectures.
Industry analysts view this move as a signal that photonic interconnects may become mainstream within the next few years, especially among hyperscalers and enterprises building large-scale AI infrastructure. Adoption may begin with early implementations in 2027–2028, scaling up rapidly as model size, compute density and data transfer demands increase.
For stakeholders — from cloud providers to data-center operators to investors — Marvell’s acquisition of Celestial AI marks a strategic inflection point: the shift from predominantly electrical connectivity to optical connectivity may redefine how data centers are designed, funded, and deployed — unlocking new levels of performance, efficiency, and scalability for the AI-driven future.
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