TLDR
- Marvell Technology is in final negotiations to purchase AI chip startup Celestial AI in a deal valued at multiple billions of dollars
- The transaction combines cash and stock, with total value potentially topping $5 billion when including performance-based milestone payments
- Celestial AI’s photonics technology uses light instead of electrical signals to enable faster data transfer between AI chips and memory
- The startup raised $515 million total, including a $250 million round in March 2025, with support from AMD and Intel CEO Lip-Bu Tan
- A deal announcement could come Tuesday, the same day Marvell reports third-quarter fiscal 2026 earnings results
Marvell Technology stands on the verge of a major acquisition that could boost its AI chip capabilities.
The chipmaker is in late-stage talks to buy Celestial AI, according to The Information. Sources say the deal involves both cash and stock.
Marvell Technology, Inc., MRVL
The base purchase price sits in the billions. Add in earnouts from product milestones and the total could climb past $5 billion.
Tuesday could bring an official announcement. Marvell reports quarterly earnings the same day.
Neither company has commented publicly on the reported negotiations. Reuters couldn’t independently confirm the deal terms.
The Technology Play
Celestial AI brings photonics expertise to the table. The company’s technology transmits data using light rather than traditional electrical signals.
This matters because data transfer speed creates bottlenecks in AI systems. Photonics solves that problem by moving information faster between computing and memory chips.
Marvell currently makes networking hardware for cloud companies. The product line includes high-speed chips, switches, and data center components.
Adding photonics would upgrade these offerings. It bridges the performance gap between electrical and optical systems.
That gap slows down massive AI workloads right now. Marvell sees photonics as critical for next-generation products.
Bringing the technology in-house removes dependence on outside suppliers. It also speeds up how fast Marvell can develop new products.
Existing cloud customers already buy Marvell chips. Photonics creates new selling opportunities with those same clients.
Competition and Funding
Marvell competes with Broadcom for custom chip contracts from major cloud providers. Broadcom currently leads in market share.
The company’s market value reaches $78.54 billion. Shares closed at $91.10 on December 1, up 1.90% for the session.
Celestial AI closed a $250 million funding round in March 2025. That brought lifetime capital raised to $515 million.
An AMD investment arm backs the startup. Intel’s CEO Lip-Bu Tan holds a board seat at Celestial AI.
These high-profile investors signal industry confidence in photonics. Silicon Valley’s biggest names see strategic value in the technology.
Stock Performance
Analysts give Marvell mixed ratings. TipRanks shows 13 Buy recommendations against six Hold ratings.
The average analyst price target hits $97. That suggests 6.5% upside from recent trading levels.
MRVL shares have fallen 17.3% in 2025. Pre-market trading on December 2 showed the stock at $92.31, up 1.33%.
The deal would represent one of the larger semiconductor acquisitions in recent months. Marvell is betting photonics will separate it from rivals in the AI chip race.
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