Marvell Technology Completes Acquisition of Celestial AI to Expand Optical Connectivity Capabilities
Marvell Technology, Inc. (NASDAQ: MRVL), a global leader in data infrastructure semiconductor solutions, announced today the successful completion of its previously announced acquisition of Celestial AI, a pioneering company in optical interconnect technology for scale-up connectivity. This strategic acquisition marks a significant step for Marvell in strengthening its position across advanced interconnect technologies that are essential for next-generation AI and cloud data center architectures.
Celestial AI is known for its Photonic Fabric™ optical interconnect technology, which is designed to deliver high-bandwidth, low-latency connectivity across large-scale AI deployments. By integrating Celestial AI’s innovative technology into its portfolio, Marvell aims to provide customers with more tightly integrated, high-performance, and power-efficient solutions for data centers, further advancing its leadership in the rapidly growing AI infrastructure market.
Expanding Marvell’s Optical Connectivity Leadership
The addition of Celestial AI enhances Marvell’s capabilities in optical interconnect solutions, which are critical for enabling high-speed communication within AI and cloud computing systems. Optical interconnect technology allows for faster data transfer with lower power consumption compared to traditional electrical interconnects, making it a key enabler for scaling AI workloads efficiently.
Through this acquisition, Marvell strengthens its end-to-end connectivity solutions, offering customers a more comprehensive and integrated suite of technologies for building the next generation of AI and cloud data centers. This positions Marvell to address a completely incremental and significant new total addressable market (TAM) in the emerging scale-up interconnect space.
Matt Murphy, Chairman and CEO of Marvell, emphasized the strategic importance of the acquisition:
Celestial AI will enable us to advance Marvell’s long-term strategy to deliver the industry’s most comprehensive data infrastructure platforms. As AI systems continue to scale in size and complexity, customers require innovative connectivity solutions. The addition of Celestial AI’s Photonic Fabric technology platform complements Marvell’s existing portfolio and enhances our ability to address the most demanding requirements of next-generation AI and cloud data center architectures. We are excited to welcome the talented team from Celestial AI to Marvell.
Integration Into Marvell’s Data Center Group
Celestial AI’s technologies and team will now operate as part of Marvell’s Data Center Group, enhancing the company’s ability to deliver complete, high-performance connectivity solutions for next-generation AI systems. By integrating Celestial AI’s Photonic Fabric platform with Marvell’s existing portfolio, the company aims to provide customers with tightly coupled optical interconnects that optimize performance while reducing power consumption and system complexity.
This integration is expected to accelerate Marvell’s ability to deliver differentiated solutions in high-bandwidth AI deployments and cloud data center environments, supporting workloads that demand extremely fast and efficient data transfer between compute nodes.
Strategic Benefits and Market Impact
The acquisition of Celestial AI provides Marvell with several strategic advantages:
- Enhanced Optical Connectivity Portfolio: Celestial AI’s Photonic Fabric technology complements Marvell’s existing electrical and optical interconnect solutions, enabling a more complete and integrated offering for data center customers.
- Addressing Next-Generation AI Demands: As AI systems grow in scale and complexity, the need for high-bandwidth, low-latency connectivity becomes critical. Celestial AI’s technology helps meet these demands efficiently.
- Expansion of Total Addressable Market: The scale-up optical interconnect market represents a significant new opportunity for Marvell, adding a completely incremental revenue stream.
- Strengthened Competitive Position: With the integration of Celestial AI’s technology, Marvell is positioned as a leader in the high-performance AI interconnect market, differentiating itself from competitors by offering end-to-end solutions.
Expected Financial Impact
Marvell anticipates that the acquisition will contribute positively to its financial performance over the coming years. Key expectations include:
- Revenue Contributions: Initial contributions from Celestial AI are expected to begin in the second half of fiscal 2028, with meaningful revenue growth projected in the fourth quarter, reaching an annualized run rate of $500 million. By the fourth quarter of fiscal 2029, revenue is expected to double, reaching approximately $1 billion annualized.
- Operating Expenses: The acquisition will add approximately $50 million in annual non-GAAP operating expenses to Marvell’s current run rate.
- Cash and Other Income Impact: The completion of the acquisition reduced Marvell’s cash balance by $1 billion, which is expected to lower interest income in future fiscal periods, resulting in an annual decrease of approximately $38 million in Other Income.
- Equity Issuance: Marvell issued equity to complete the acquisition, increasing the company’s diluted weighted-average shares outstanding by approximately 27 million shares.
These financial metrics reflect Marvell’s commitment to long-term growth and investment in next-generation AI and cloud data center technologies. The expected ramp in revenue and strategic positioning further underscores the value of integrating Celestial AI’s advanced technology into Marvell’s operations.
Looking Ahead
The acquisition of Celestial AI represents a critical milestone in Marvell’s strategy to deliver comprehensive, high-performance data infrastructure solutions. By combining Celestial AI’s optical interconnect expertise with Marvell’s existing semiconductor solutions, the company is better positioned to meet the growing demands of AI and cloud data center operators worldwide.
remains focused on advancing innovation in high-bandwidth, low-latency interconnect solutions, ensuring that customers can scale AI workloads efficiently while maintaining energy efficiency and operational performance. The integration of Celestial AI is expected to accelerate Marvell’s growth in the AI interconnect market and reinforce its leadership position in delivering cutting-edge technology for next-generation data centers.
This acquisition demonstrates commitment to innovation and leadership in data infrastructure technologies,” added Murphy. “With Celestial AI on board, we are uniquely positioned to deliver solutions that meet the most demanding requirements of AI and cloud data center customers, supporting their growth today and in the future.
Marvell’s completion of the Celestial AI acquisition reinforces its position as a technology leader in the scale-up interconnect market, providing customers with industry-leading optical and electrical connectivity solutions. With a strengthened portfolio, expanded capabilities, and an experienced team, is poised to deliver high-performance, energy-efficient solutions that power the next generation of AI and cloud data center architectures.
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