Marvell Technology is in advanced talks to acquire chip startup Celestial AI in a cash-and-stock deal potentially valued at more than $5 billion.

The acquisition is aimed at advancing Marvell’s strategy to develop connectivity solutions for AI and cloud data centres.

Marvell Technology is capitalizing on the AI boom with its $3.25B acquisition of Celestial AI, enhancing its high-speed networking and custom chip portfolio. MRVL expects AI-driven data center revenue growth of 45% in FY2026 and 40% in FY2028, supported by multiple design wins with major hyperscalers and deepened AWS engagement.

The initial $3.25 billion will be paid once the transaction has been approved by regulators, expected early next year. Marvell said the maximum payout of $5.5 billion will be triggered if Celestial AI manages to generate $2 billion in cumulative revenue by the end of Fiscal 2029.

Marvell Technology, Inc. (NASDAQ: MRVL), a leader in data infrastructure semiconductor solutions, today announced it has entered into a definitive agreement to acquire Celestial AI, a pioneer of a disruptive Photonic Fabric technology platform purpose-built for scale-up optical interconnect.

It was only a matter of time before Marvell was going to make another silicon photonics acquisition, and the $2.5 billion sale of its automotive Ethernet

Marvell just snapped up Celestial AI for $3.25B, fast-tracking light-based chips and taking aim at Broadcom and Nvidia. A bold bet that sent shares soaring.

Marvell stock fell despite the chipmaker beating earnings estimates.