Optical technology meets the AI boom
Marvell Technology has agreed to acquire Celestial AI in a major deal that marks a turning point for data centre design. The agreement values Celestial AI at around 3.25 billion dollars, using a mix of cash and Marvell shares. The total value could rise further depending on future performance milestones.
The acquisition brings together Celestial AI’s advanced optical interconnects with Marvell’s established strengths in networking and data centre connectivity. As cloud providers and hyperscalers attempt to scale ever larger AI workloads, this combined offering is expected to influence how silicon, memory, and compute communicate in large distributed systems.
Why Celestial AI matters
Traditional copper links are no longer sufficient for modern AI workloads. Tasks that once ran within a single rack now stretch across many XPUs and distributed memory pools. Copper does not offer the bandwidth, low latency, or power efficiency needed for this level of scale.
Celestial AI’s Photonic Fabric technology provides optical connectivity from inside the chip package to across racks and data centre nodes. This allows memory and compute to be shared more freely, supporting high performance systems with lower energy use and minimal latency.
Its first generation Photonic Fabric chiplet delivers up to 16 terabits per second of bandwidth, far higher than the 1.6 terabit links widely used today. It also offers strong thermal stability, allowing the optics to be placed close to high power AI processors without reducing reliability.
Funding history and company background
Celestial AI has grown rapidly since its launch, supported by several major funding rounds.
- In March 2024 the company raised 175 million dollars in a Series C round led by the US Innovative Technology Fund. Backers included AMD Ventures, Temasek, Samsung Catalyst, Koch Disruptive Technologies, and Porsche Automobil Holding.
- In March 2025 it secured a further 250 million dollars in a Series C1 round led by Fidelity Management and Research. This brought total disclosed funding to more than 515 million dollars. Other named investors included BlackRock, Tiger Global, Maverick Silicon, and Lip Bu Tan.
- In August 2025 the company closed an additional 255 million dollars as part of the same Series C1 round. This raised total funding to about 520 million dollars and supported the commercial rollout of Photonic Fabric along with expansion of its supply chain.
The company was founded by semiconductor industry leaders David Lazovsky and Preet Virk, who brought deep expertise in advanced materials, analogue semiconductors, and high performance system design.
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Celestial AI Leadership and Company Direction
Celestial AI is led by experienced semiconductor innovators who have shaped the company’s rapid growth and technological edge.
David Lazovsky serves as Chief Executive Officer. He previously founded Intermolecular, a company focused on advanced materials and semiconductor process development. His background gives Celestial AI a strong foundation in materials science, manufacturing, and commercialisation of deep technology.
Preet Virk, the company’s Chief Operating Officer, brings extensive experience in analogue and mixed signal semiconductor design. He has held senior engineering and leadership roles at Macom and Mindspeed Technologies. His expertise supports Celestial AI’s technical execution, product development, and large scale deployment of optical chiplet solutions.
Together they guide the company’s strategy as it scales its Photonic Fabric technology and expands partnerships with hyperscalers, cloud providers, and semiconductor leaders worldwide.
What the Marvell acquisition means
Under the terms of the agreement, Marvell will pay around one billion dollars in cash and about 27 million common shares worth roughly 2.25 billion dollars. Celestial AI shareholders may receive additional shares if revenue targets are met between fiscal 2028 and fiscal 2029.
The deal is expected to close in early 2026, subject to regulatory approvals. For Marvell this acquisition strengthens its capabilities in scale out and scale across networking and adds optical scale up technology to its portfolio.
The company believes that optical interconnects represent a new multibillion dollar market as AI clusters grow larger. Celestial AI’s chiplet based architecture is expected to support memory pooling, lower latency, and more energy efficient communication between processors.
Looking ahead
Marvell expects the acquired business to begin contributing revenue during the second half of its fiscal year 2028. Forecasts suggest an annualised revenue of around 500 million dollars by late 2028, with potential to double to one billion dollars the following year.
Industry analysts expect rapid adoption of optical interconnects at the chip and rack level. If Celestial AI’s technology becomes widely used, it could influence future data centre design by enabling more flexible memory use, faster scaling, and improved energy efficiency.
Why this matters
The acquisition is more than a financial transaction. It signals a wider shift in the industry as data centres prepare for the next generation of AI models and compute hungry applications. Optical links are emerging as the foundation of future infrastructure.
By bringing Celestial AI into its portfolio, Marvell is positioning itself to help define this future. The move supports a transition away from copper based designs and towards high bandwidth, low latency, and energy efficient optical fabrics that can support the demands of modern AI.
The outcome of this deal will be watched closely by anyone involved in AI hardware, cloud computing, and semiconductor research, as it may set new standards for how data centres are built in the years ahead.