According to The Information, citing people familiar with the matter, U.S. chipmaker$Marvell Technology (MRVL.US)$is in advanced negotiations to acquire chip startup Celestial AI in a cash-and-stock deal worth billions of dollars.
People familiar with the matter said that the total deal value, including product milestone payments, could exceed $5 billion and added that the transaction might be announced as early as December 3.
Marvell Technology, a network chip manufacturer with a market capitalization of $78.54 billion, competes with its larger rival Broadcom in the areas of supplier-customized chips and networking business.
The potential acquisition of Celestial AI would enhance Marvell Technology’s product portfolio, highlighting the continued strong demand for computing power in the market.
Celestial AI, which is backed by an affiliate of AMD, raised $250 million in venture capital funding in March, bringing its total financing to $515 million.
The company, which lists Intel CEO Lip-Bu Tan as a board member, is leveraging photonics technology—a method using light instead of electrical signals—to establish high-speed connections between AI computing chips and memory chips.
Committed to solving the 'memory wall' crisis
Celestial AI is dedicated to developing the Photonic Fabric optical interconnect platform, which aims to address the 'memory wall' bottleneck in today's AI computing architectures. By utilizing optical interconnects, Celestial AI provides a high-bandwidth, low-latency, and low-power solution that supports AI accelerators scaling from on-chip to multi-rack deployments.
In the face of large-scale parameter AI model architectures, parameterized data has already 'exploded' in memory. The memory wall has become the biggest obstacle to system performance scaling due to the severe mismatch between the data access speeds of computing units (CPU, NPU, etc.) and memory (DDR, HBM). When the parameter scale is relatively small, hardware stacking can still alleviate the issue; however, as models expand to tens of trillions of parameters, the computational power of processing units is severely hindered by low memory bandwidth and high latency, significantly reducing system efficiency.
Celestial AI, like other companies in the industry focused on interconnects, addresses the bottleneck between computing and memory with its Photonic Fabric optical interconnect platform. It has completed multiple rounds of financing, raising over $515 million in total.
Celestial AI has attracted significant capital investment. AMD and Intel are urgently seeking to break NVIDIA's NVLink closed ecosystem and extend their own computing chips into a new domain of optical interconnects. Samsung, with the world's largest HBM and DDR production capacity, needs Celestial AI’s memory pooling to expand its business model.
Through the acquisition of Celestial AI,$Marvell Technology (MRVL.US)$Marvell Technology has secured a 'future ace.' If optical interconnect technology becomes the standard configuration for the next generation of AI servers (as widely expected in the industry), Marvell will own the core intellectual property, significantly increasing its leverage in securing next-generation orders from cloud giants such as Microsoft and Google.
Editor/melody