Marvell Finalizes $3.25B Celestial AI Acquisition | News

Marvell Technology, Inc. has completed its previously announced acquisition of Celestial AI, a deal valued at approximately $3.25 billion in cash and stock that closed on February 2, 2026, according to company filings and press releases.

The transaction brings Celestial AI’s optical interconnect technology and team into Marvell’s Data Center Group, as the U.S. semiconductor firm seeks to broaden its connectivity offerings for next-generation AI and cloud data center infrastructure.

Marvell, headquartered in Santa Clara, California, executed the acquisition with an upfront consideration of roughly $1 billion in cash and approximately 27 million newly issued Marvell common shares. The deal, originally announced in December 2025, was structured to include additional contingent equity consideration based on future revenue milestones. Celestial AI’s Photonic Fabric optical interconnect technology, designed for high-bandwidth, low-latency connectivity across large artificial intelligence (AI) deployments, will be integrated into Marvell’s portfolio and operations within its Data Center Group as part of the completed transaction.

Under the terms of the agreement, Marvell issued equity that increased its diluted weighted-average shares outstanding by about 27 million shares. The closing also reduced the company’s consolidated cash balance by approximately $1 billion and is expected to add nearly $50 million in annual non-GAAP operating expenses to Marvell’s existing cost structure. These financial impacts were disclosed in public filings accompanying the transaction close.

Marvell’s press release noted that initial revenue contributions from Celestial AI’s operations are anticipated to begin in the second half of fiscal 2028, with a meaningful ramp expected by the fourth quarter of that fiscal year to an annualized run rate of about $500 million. The combined business is forecast to reach a $1 billion annualized run rate by the fourth quarter of fiscal 2029. These figures were provided by Marvell in regulatory filings and press documentation outlining expected financial results following the acquisition close.

Celestial AI’s core Photonic Fabric platform, a proprietary optical interconnect technology, is designed to facilitate high-bandwidth and energy-efficient connectivity across AI systems that extend beyond single-rack configurations. Marvell described the technology as enhancing its ability to meet increasing demand for connectivity solutions in large-scale AI and cloud data center environments, augmenting its existing semiconductor solutions for data infrastructure. The technology’s low-latency, low-power optical architecture was a central rationale for the acquisition.

The completed acquisition follows regulatory processes, including an early termination of the U.S. Federal Trade Commission’s waiting period, allowing Marvell to proceed with transaction closure in early 2026. This regulatory clearance was reported in financial and market news sources ahead of the closing announcement.

Industry sources indicated that Marvell’s offer was driven in part by the broader shift in data center architectures toward optical connections as AI workloads scale in size and complexity. Celestial AI’s technology was positioned as a strategic asset to support transitions from traditional copper-based interconnects to optical solutions within and across server racks, a market segment anticipated to grow as next-generation accelerated platforms proliferate.

Marvell’s acquisition of Celestial AI adds to a series of strategic moves by the company in recent months to expand its capabilities in AI data center connectivity. Prior announcements included plans to acquire complementary technology businesses to bolster Marvell’s portfolio in high-performance interconnects and switching silicon, demonstrating a concerted effort to address evolving demands in data infrastructure markets.

The integration of Celestial AI’s operations and technologies into Marvell’s enterprise aims to position the combined entity as a more comprehensive provider of high-bandwidth, power-efficient, low-latency connectivity solutions tailored to emerging demands from hyperscale cloud service providers and AI system designers.