Marvell Technology, a leader in data infrastructure semiconductors, has officially completed its acquisition of Celestial AI, a pioneer in optical interconnects. This strategic transaction brings Celestial AI’s groundbreaking Photonic Fabric™ technology into Marvell’s extensive portfolio. The move is designed to significantly enhance Marvell's capabilities in providing high-bandwidth, low-latency connectivity solutions for next-generation AI and cloud data centers.
A Strategic Leap in AI Connectivity
This acquisition addresses the critical need for advanced interconnect solutions as AI systems continue to grow in scale and complexity. By integrating Celestial AI's optical interconnects, Marvell fortifies its leadership across the essential technologies required for future data center architectures. The company is now better positioned to serve a completely new and incremental total addressable market in scale-up connectivity.
Matt Murphy, Chairman and CEO of Marvell, emphasized that the deal advances the company's long-term strategy to deliver comprehensive data infrastructure platforms. He noted that customers require innovative solutions to manage the demands of increasingly sophisticated AI models. The addition of Celestial AI's platform enhances Marvell's ability to meet these demanding requirements for performance and efficiency.
The Promise of Photonic Fabric Technology
At the core of the acquisition is Celestial AI’s Photonic Fabric™, a state-of-the-art optical interconnect technology platform. It is engineered to support the massive data flows and low-latency communication essential for large-scale AI training and inference workloads. This technology enables more tightly integrated and power-efficient solutions compared to traditional electrical interconnects, overcoming critical performance bottlenecks.
Integration and Financial Outlook
Operationally, the talented teams and advanced technologies from Celestial AI will be integrated into Marvell’s existing Data Center Group. This consolidation is expected to strengthen the company's end-to-end connectivity offerings for the most advanced AI systems. The synergy between the two organizations aims to accelerate innovation and deliver more comprehensive solutions to data center customers.
Marvell has outlined a clear financial roadmap for the acquisition, projecting initial revenue contributions in the second half of fiscal 2028. The company forecasts revenue will ramp to a significant $500 million annualized run rate by the fourth quarter of that year. This growth is expected to accelerate, doubling to a $1 billion annualized run rate by the fourth quarter of fiscal 2029.
The transaction was funded through a $1 billion reduction in Marvell's cash balance and the issuance of approximately 27 million diluted weighted-average shares. The company also anticipates an increase of roughly $50 million in annual non-GAAP operating expenses. This investment structure reflects Marvell's confidence in the long-term value and strategic importance of Celestial AI's technology.
In summary, Marvell's acquisition of Celestial AI is a decisive move to solidify its position at the forefront of AI infrastructure technology. By integrating pioneering optical interconnect solutions, the company is strategically prepared to address the critical connectivity challenges of future data centers. This investment not only expands Marvell's market opportunity but also reinforces its commitment to enabling the next wave of AI innovation.