Marvell Technology will acquire optical-components maker Lumentum in a $115 billion all-stock deal, betting that demand for high-speed data-center interconnects will continue to grow alongside AI infrastructure spending.
Marvell Technology announced Monday it will acquire optical-components maker Lumentum in an all-stock transaction valued at $115 billion, the latest and largest corporate bet on sustained artificial intelligence infrastructure spending.
The deal, which ranks among the biggest announced in 2026, would combine Marvell's custom chip and networking business with Lumentum's portfolio of optical components used to move data at high speeds across AI data centers.
Marvell CEO Matt Murphy and Lumentum CEO Michael Hurlston are scheduled to discuss the transaction in a televised interview Monday morning. The deal is expected to close in the first half of 2028.
By absorbing a company roughly half its size, Marvell is signaling confidence that demand for high-speed optical interconnects will continue to outpace supply as Big Tech companies pour capital into AI infrastructure. The acquisition is Marvell's largest since its $10 billion purchase of Inphi in 2021, and follows its $3.5 billion close of Celestial AI in February of this year.
Marvell's own trajectory underscores how quickly the AI boom has reshaped the semiconductor landscape. Three years ago the company was a relatively little-known chipmaker; its market value has since surged to more than $170 billion, driven by contracts to help tech giants including Amazon develop custom AI chips and data-center networking technology.
The company notched one of its biggest commercial wins in August, signing an agreement to supply chips alongside Google's AI processors worth up to $120 billion in sales through fiscal 2033, with the search giant also receiving the right to acquire a $12.2 billion stake in Marvell. Its annual revenue has more than doubled, from $3 billion in fiscal 2021 to $8.2 billion in fiscal 2026.
Nvidia has placed sizable bets on both sides of the deal, having invested $2 billion each in Marvell and Lumentum earlier this year. Nvidia CEO Jensen Huang drew attention to Marvell's ambitions in June when he called the company the next "trillion-dollar company."
The acquisition also intensifies Marvell's competition with Broadcom, which has long served as Alphabet-owned Google's primary custom-chip partner and offers customers a broader range of AI data-center hardware under a single supplier relationship.
Lumentum, which competes with U.S.-listed Coherent and China's Zhongji Innolight, could benefit from a proposed U.S. ban on new Chinese optical transceivers. Such a restriction would be expected to redirect demand toward domestic suppliers, potentially strengthening Lumentum's commercial position ahead of closing.
Since talks between the two companies were first reported late last month, Lumentum shares had fallen roughly 8% and Marvell shares had dropped approximately 22%, amid a broad chip selloff that accelerated after Intel issued a weak forecast. Marvell shares ticked 3% higher and Lumentum rose 2% before being halted in premarket trading Monday.
The transaction signals that leading chipmakers view the current AI infrastructure cycle not as a temporary surge but as a durable expansion requiring deeper vertical integration — combining the custom silicon that accelerates AI workloads with the photonics that carry data between them at scale.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
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