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.

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 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.

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 has agreed to acquire Celestial AI, which makes an optical interconnect technology platform for AI computing called Photonic Fabric.

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.