Marvell Technology Inc. has confirmed the acquisition of AI startup Celestial AI for a base value of $3.25 billion in cash and stock, with the total potential price rising to $5.5 billion if revenue milestones are achieved. The deal, announced alongside Marvell's third-quarter earnings, is set to close in early 2026.
Celestial AI specializes in optical interconnect technology called "photonic fabric," which uses light to transfer data between components in AI systems, addressing bottlenecks in advanced AI computing. The startup, founded in 2020 and based in Santa Clara, California, completed a $255 million funding round in August 2025 and is backed by investors such as Fidelity Management & Research Co., BlackRock Inc., Advanced Micro Devices Inc., and Intel CEO Lip-Bu Tan.
Marvell CEO Matt Murphy stated the acquisition broadens the company's networking capabilities and aims to deliver a "complete connectivity platform" for AI and cloud customers. He forecasted custom chip revenue growth of 20% next year and overall revenue potentially reaching $10 billion in the next fiscal year, exceeding analyst expectations.
Following the announcement, Marvell's shares surged over 15% in late trading to $102.22, reversing earlier losses. The company also provided guidance for the current quarter, with revenue projected at $2.2 billion and adjusted earnings per share of 79 cents, aligning with Wall Street estimates.
