Marvell Acquires Celestial AI and Puts Itself in the Big Game

[kit_hung]

Marvell Technology has decided to get deep into the AI chip game by buying startup Celestial AI for a deal worth nearly $3.25 billion. The move has sparked excitement, sending shares up nearly 13 percent in extended trading. It's a confidence signal after CEO Matt Murphy gave a strong forecast for revenue of $10 billion next year.

The new acquisition is Celestial's photonics tech. This is a technology that uses light instead of electrical signals to connect AI chips and memory chips. This puts Marvell on a par with the likes of Broadcom and Nvidia. Murphy made it clear that they want to create a silicon photonics powerhouse and this will be a new product line with a potential market of $10 billion.

The deal is set to close in the first quarter of 2026 and Celestial will receive $1 billion in cash and Marvell shares worth $2.25 billion. Revenue from this acquisition is expected to start appearing in 2028 and reach a run rate of one billion in 2029. Amazon has also been granted a warrant to buy Marvell shares based on its purchases of photonic fabric products through 2030.

Marvel is currently under intense competitive pressure in custom AI chips, but this move could be a game-changer and bring new energy to the data center market.




source: reuters.

 

[gwolf666]

I believe Marvell's acquisition of Celestial AI is a very smart strategic move. Light-based photonics technology can revolutionize the speed and efficiency of connections between chips, putting Marvell on equal footing with giants like Nvidia and Broadcom. The nearly $3.25 billion investment demonstrates their confidence in the potential of this technology, and the revenue forecast starting in 2028 indicates a long-term vision. Furthermore, the inclusion of Amazon with a future purchase option reinforces the significance of this acquisition in the market. While it will still be some time before we see the results, I believe this move can position Marvell as a key player in the AI and data center chip sector. It will certainly be interesting to follow how this investment plays out in such a competitive and rapidly expanding market.

 

[Kross]

I am actually not in support of relying too much on AI for game development. Games won't come out well with that.