Marvell Technology has entered into a definitive agreement to acquire Celestial AI for $3.25 billion, a move aimed at accelerating its leadership in next-generation data center connectivity. The acquisition centers on Celestial AI's Photonic Fabric technology, a breakthrough optical interconnect platform designed to enable high-bandwidth, low-latency scale-up fabrics for multi-rack AI clusters.
Marvell Technology agrees to acquire Celestial AI for $3.25 billion in cash and stock.
Celestial AI's core asset is its Photonic Fabric optical interconnect technology platform.
The technology targets scale-up connectivity within and across racks for next-gen AI data centers.
It promises over 2x the power efficiency of copper, with longer reach and 16 Tb/s bandwidth per chiplet.
Marvell expects meaningful revenue from the acquisition in the second half of fiscal 2028.
The deal includes an earnout of up to $2.25B in stock based on revenue milestones through FY2029.
The acquisition addresses a fundamental shift in AI data center architecture, where systems are evolving into multi-rack configurations requiring any-to-any connectivity between hundreds of accelerators (XPUs). These "scale-up" fabrics demand ultra-low latency and high bandwidth, driving a transition from electrical copper interconnects to optical solutions. Marvell positions this acquisition as critical to leading this technological inflection and capturing a new semiconductor market.
Celestial AI's Photonic Fabric is a purpose-built optical I/O platform designed to connect XPUs and switches within a rack or system. Its key differentiators include exceptional thermal stability, allowing it to be co-packaged vertically with high-power chips, and a compact chiplet delivering 16 terabits per second of bandwidth—ten times that of current 1.6T scale-out ports. This enables deeper optical integration directly into the XPU package, freeing up space for more high-bandwidth memory (HBM).
By combining Celestial AI's optical scale-up interconnects with its existing leadership in scale-out and scale-across connectivity, Marvell aims to offer the industry's most complete connectivity platform for AI and cloud data centers. The Photonic Fabric technology is expected to be co-packaged with custom XPUs and Marvell's UALink-compatible scale-up switches, enabling large-scale commercial deployment of optical scale-up connectivity.
The transaction values Celestial AI at $3.25 billion upfront ($1B cash, $2.25B stock), with an additional earnout of up to $2.25 billion in Marvell stock contingent on revenue milestones through fiscal 2029. Marvell projects Celestial AI will reach a $500 million annualized revenue run rate in Q4 FY2028, doubling to $1 billion by Q4 FY2029. The deal is expected to close in Q1 2026, pending approvals.
This strategic acquisition underscores the critical and growing importance of advanced interconnect technology as a bottleneck and enabler for the next generation of AI infrastructure, positioning Marvell at the forefront of this high-stakes hardware evolution.
About Marvell
To deliver the data infrastructure technology that connects the world, we’re building solutions on the most powerful foundation: our partnerships with our customers. Trusted by the world’s leading technology companies for over 30 years, we move, store, process and secure the world’s data with semiconductor solutions designed for our customers’ current needs and future ambitions. Through a process of deep collaboration and transparency, we’re ultimately changing the way tomorrow’s enterprise, cloud and carrier architectures transform—for the better.
About Celestial AI
Celestial AI is the creator of the Photonic Fabric, an optical interconnect technology platform for AI computing systems. The Photonic Fabric provides the foundational technology for data center computing, networking and memory systems to enable advancements in AI with sustainable and profitable business models. Celestial AI’s Photonic Fabric delivers a transformative leap in AI system performance and energy efficiency.
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