Marvell’s Mega Move: Multi-Billion Dollar Play for Celestial AI’s Future-Shaping Chip Tech

Updated: December 02, 2025 14:55

Image Source : Rolling Out

US chipmaker Marvell Technology is in advanced talks to acquire Santa Clara-based startup Celestial AI in a multi-billion-dollar cash-and-stock deal, according to The Information. The transaction, which could top $5 billion including earn-outs, would deepen Marvell’s artificial intelligence data-center portfolio amid surging demand for AI-optimized silicon.

Marvell Technology is reportedly negotiating an acquisition of photonics-focused chip startup Celestial AI, in what could become one of its largest bets yet on AI infrastructure. The Information reports that the potential cash-and-stock deal is valued in the “multiple billions” of dollars, with performance-based earn-outs possibly pushing the total consideration above $5 billion.

Celestial AI, headquartered in Santa Clara, is developing an optical interconnect architecture called Photonic Fabric designed to move data more efficiently inside AI data centers, addressing memory bandwidth and power bottlenecks that limit current GPU-centric systems. Though the startup is pre-revenue, it has attracted strong interest from cloud and semiconductor players for its promise in large-scale AI workloads.

For Marvell, which already supplies custom accelerators, networking, and optical connectivity chips to hyperscalers, acquiring Celestial AI would strengthen its position against rivals in the rapidly growing AI data-center silicon market. Neither Marvell nor Celestial AI have commented publicly, and Reuters notes it has not independently verified the report, meaning deal terms and timing could still change.

Key Highlights:

Marvell in advanced talks to buy Celestial AI in a multi-billion-dollar cash-and-stock deal.
Total value, including earn-outs tied to product milestones, could exceed $5 billion.
Celestial AI develops Photonic Fabric optical interconnects to boost AI data-center performance and efficiency.
Startup is pre-revenue but seen as strategically important for next-gen AI infrastructure.
Deal would deepen Marvell’s AI data-center portfolio in accelerators, networking, and optical connectivity.
No official confirmation yet; companies declined or did not respond to media requests for comment.

Sources: The Information, Reuters, Investing.com, GuruFocus, Yahoo Finance AI news feeds.

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