**Marvell Technology to Acquire Celestial AI for $3.25 Billion**
Marvell Technology has announced its intention to acquire the artificial intelligence startup Celestial AI in a deal valued at $3.25 billion. This announcement coincided with Marvell’s release of its third-quarter financial results, which included an optimistic outlook for the upcoming fiscal year. The acquisition aligns with Marvell’s strategy to capitalize on the increasing investments in AI computing.
Following the news, Marvell’s shares surged by 8.73%, reaching $101 in after-hours trading, up from a closing price of $92.89 earlier that day. The acquisition deal comprises a $1 billion cash payment and $2.25 billion worth of Marvell shares, totaling 27.2 million shares of common stock for Celestial AI.
Founded in 2020 and based in Santa Clara, California, Celestial AI specializes in a technology known as photonic fabric, which facilitates connections within AI infrastructure using light instead of electrical signals. This innovative approach positions Marvell to compete more effectively against industry giants like Broadcom and Nvidia.
Marvell’s CEO, Matt Murphy, emphasized the significance of Celestial AI’s technology, stating it will be integrated into Marvell’s next-generation photonics-related infrastructure products. He projected that this acquisition could open up a new market for the company, potentially generating around $10 billion in revenue. Murphy noted that the Celestial AI technology is expected to contribute to meaningful revenue starting in the second half of fiscal 2028, with projections of reaching an annualized run rate of $500 million by the fourth quarter of that fiscal year, and doubling to $1 billion by the fourth quarter of fiscal 2029.
The deal is anticipated to close in the first quarter of calendar year 2026. Celestial AI recently secured $255 million in funding, with notable investors including Fidelity Management & Research Co., BlackRock Inc., and Advanced Micro Devices Inc. Intel’s CEO, Lip-Bu Tan, also invested in the startup and joined its board earlier this year.
As Marvell positions itself to benefit from the AI spending surge, the success of the Celestial AI acquisition will play a crucial role in shaping the company’s future in the AI sector.
**FAQ**
**What is the significance of Marvell’s acquisition of Celestial AI?**
The acquisition is significant as it allows Marvell to enhance its capabilities in AI infrastructure through Celestial AI’s innovative photonic technology, positioning the company to capture a larger share of the growing AI market.
