Marvell Acquires Semiconductor Startup CelestialAI
Stock Purchase Rights Granted to Amazon Based on Product Purchase Performance
US semiconductor company Marvell Technology has acquired the AI semiconductor startup CelestialAI.
On December 2 (local time), Marvell announced that it would acquire CelestialAI for a total of $3.25 billion in cash and stock. Marvell also stated that if CelestialAI achieves a cumulative revenue of $500 million by 2029, it will grant CelestialAI shareholders an additional 27.2 million shares of Marvell stock, valued at $2.25 billion.
CelestialAI is a company that possesses photonic interconnect technology, which uses light instead of electrical signals to facilitate data connections between chips and memory. By utilizing optical interconnect technology instead of traditional copper wiring during AI training and inference processes that require processing massive amounts of data, transmission speeds can be increased and power efficiency can be improved. In March, CelestialAI was valued at $2.5 billion and received a significant investment from AMD.
With this acquisition, Marvell will enter the photonic interconnect technology sector and be able to compete with companies such as Nvidia and Broadcom. Matt Murphy, CEO of Marvell, stated, "The acquisition of CelestialAI is a transformative step in Marvell's evolution," adding that products incorporating this technology will create a new market worth $10 billion.
In connection with this acquisition, Marvell also signed a product purchase agreement with Amazon. Amazon Web Services (AWS) will be granted the right to purchase up to $90 million worth of Marvell stock at approximately $87 per share, based on its purchases of Marvell's optical interconnect products through the end of 2030.
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Marvell reported third-quarter (September to November) revenue of $2.07 billion, which matched the forecast by market research firm LESG. Marvell also projected fourth-quarter revenue to exceed expectations at $2.2 billion, with the data center segment expected to make a significant contribution.
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