Marvell-Lumentum deal: AI’s next bottleneck is moving data | Can an $83 billion bet pay off?
Marvell Technology is in advanced talks to buy data-center optics maker Lumentum Holdings, a potential mega deal that would deepen its push into optical technologies to power artificial intelligence infrastructure. The $83 billion deal is likely to be announced next week.
A final agreement has not been reached, and the discussions could still end without a deal, Bloomberg reported. The timing and other details could also change.
The potential acquisition underscores how the AI boom is driving dealmaking as companies race to build infrastructure capable of handling increasingly demanding workloads.
Lumentum has a market value of about $83 billion, compared with Marvell’s $221 billion, according to Bloomberg. An acquisition would likely rank among the 10 biggest technology and telecommunications mergers ever, Bloomberg reported, citing data compiled by the news agency.
Lumentum makes lasers and other optical technology for moving enormous amounts of data at high speeds. That hardware underpins the AI boom, as it lets data centers and telecommunications firms move information between servers, facilities and other destinations.
Bloomberg reported that Lumentum’s hardware underpins the AI boom by helping data centres and telecommunications companies move information between servers, facilities and other destinations.
The acquisition would also bring together two companies with an existing supplier relationship. Marvell purchases lasers from Lumentum, meaning a deal could simplify its supply chain, Bloomberg reported.
Marvell has been expanding its investments in optical and photonic technologies, which use light rather than traditional copper wiring to move data faster and more efficiently. Earlier this year, it acquired photonics company Celestial AI.
Reuters reported that the Celestial AI acquisition, announced in a $3.25 billion deal late last year, reinforced Marvell’s strategy of expanding into optical technologies used in AI infrastructure.
Nvidia has also taken a $2 billion stake in Lumentum under an agreement that includes collaboration on photonics, Bloomberg reported.
Marvell has emerged as one of the biggest beneficiaries of the AI spending boom, with its shares nearly tripling this year as demand for its custom AI chips and networking products surged.
The potential acquisition would further Marvell's push into optical technologies used in AI infrastructure, a strategy that Bernstein analysts said was reinforced by the company's acquisition of photonics firm Celestial AI in a $3.25 billion deal announced late last year.
Marvell raised its fiscal 2028 revenue forecast earlier this month to $20 billion from $15 billion, citing strong demand for its custom AI chips and networking products used in data centers.
While Marvell had about $3.92 billion in cash and cash equivalents as of its latest quarter, Bernstein analysts told Reuters that an acquisition of that size would likely require additional financing and could present integration challenges.
Investors reacted differently to the potential transaction. Marvell shares fell about 9% after regular trading on Wednesday, while Lumentum gained about 11% in extended trading.
Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. <br> She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br> She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. <br> Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, she was also a national-level badminton player.
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