U.S. semiconductor corporations Marvell Technology has acquired artificial intelligence (AI) semiconductor startup CelestialAI.
Marvell said on the 2nd (local time) that it will acquire CelestialAI for a combined $3.25 billion in cash and stock (about 4.8 trillion won). Marvell also said it will grant CelestialAI shareholders an additional 27.2 million shares of Marvell stock worth $2.25 billion if CelestialAI achieves cumulative revenue of $500 million by 2029.
Marvell expects that in practice CelestialAI will begin contributing revenue in the second half of 2028, reach an annual revenue run rate of $500 million in the fourth quarter, and hit an annual revenue run rate of $1 billion in the fourth quarter of 2029.
CelestialAI is a corporations with Photonic Fabric technology that uses light instead of electrical signals to help data consolidation between chips and memory. In AI training and inference processes that must handle massive amounts of data, using optical consolidation technology instead of conventional copper-wire connections can increase transmission speeds and improve power efficiency.
Accordingly, in Mar. CelestialAI received a valuation of $2.5 billion and secured a large investment from AMD, and Intel Chief Executive Officer (CEO) Lip-Bu Tan also joined the company's board earlier this year.
With this acquisition, Marvell enters the photonic consolidation technology field and will be able to compete with Nvidia and Broadcom. Matt Murphy, Marvell CEO, noted to Reuters that "the acquisition of CelestialAI is a transformative step in Marvell's evolution," adding that products applying this technology will create a new $10 billion market.
In connection with this acquisition, Marvell also signed a related product purchase agreement with Amazon. Amazon Web Services (AWS) will be granted the right to purchase up to $90 million (about 130 billion won) worth of Marvell shares at about $87 per share, linked to its purchases of Marvell's optical consolidation products through the end of 2030.
Marvell also reported results that slightly beat market estimates on the day. Marvell's fiscal year third-quarter (September–November) revenue was $2.08 billion, higher than market research firm LESG's estimate of $2.07 billion, and earnings per share (EPS) were $0.76, above the estimate ($0.73).
Marvell forecast fourth-quarter revenue of $2.2 billion, above expectations, and in particular projected that next year's data center institutional sector revenue will grow 25%.