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Marvell Acquires Celestial AI for $3.25 Billion to Boost Optical Interconnect Technology
Sunday, December 7, 2025 at 08:30 PM
Marvell Technology has entered into a definitive agreement to acquire semiconductor startup Celestial AI for approximately $3.25 billion (about 500 billion yen) in a move to accelerate its strategy for optical interconnect and Photonic Fabric technology in next-generation AI and cloud data centers. The transaction is expected to close in the first quarter of calendar 2026.
Context
Marvell Technology announced its acquisition of Celestial AI for an upfront consideration of $3.25 billion, with a potential to reach $5.5 billion based on performance milestones. This strategic move, expected to close in the first quarter of calendar 2026, aims to strengthen Marvell's position in the rapidly expanding AI and cloud data center markets.
The acquisition focuses on Celestial AI's "Photonic Fabric" technology, an optical interconnect platform designed to meet the increasing bandwidth, latency, and power demands of next-generation AI systems. By integrating this technology, Marvell seeks to accelerate its connectivity roadmap, enabling more efficient scale-up connections between AI chips and memory, and directly challenging competitors like Nvidia and Broadcom in the high-end optical interconnect space.
Marvell anticipates significant financial impact, projecting Celestial AI to contribute meaningful revenue starting in the second half of fiscal 2028, reaching an annualized run rate of $500 million by Q4 fiscal 2028, and doubling to $1 billion by Q4 fiscal 2029. This deal highlights the critical role of advanced optical interconnects in future AI infrastructure.
Sources (9)
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