Marvell Announces $115 Billion Acquisition of Optical Components Maker Lumentum to in Effort to Upgrade AI Speed

Marvell Technology announced Monday it agreed to acquire optical components maker Lumentum in an all-stock transaction with an implied enterprise value of $115 billion, making a sweeping bet that the artificial intelligence boom will drive sustained demand for faster connections between chips and data centers.

Lumentum shareholders will receive 4.5 Marvell shares for each share they own. Because the exchange ratio is fixed, the market value of the consideration will fluctuate with Marvell's stock price rather than remain at a guaranteed dollar amount. The $115 billion headline figure includes debt.

The companies expect the acquisition to close in the first half of 2028, subject to shareholder and regulatory approvals. "AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation," Marvell Chairman and CEO Matt Murphy said in the announcement.

"The companies that move first and help define this transition will set the standard for decades to come." The acquisition targets the increasingly important challenge of moving information quickly enough to support the computing power being installed.

Companies developing and operating large language models need connections that allow their chips to work together efficiently. As those systems expand, the links between processors, servers and facilities become a critical part of their performance.

Marvell said the combination would unite electrical and optical technologies to address those evolving requirements across different systems and distances. Its strategy reflects growing industry reliance on optical connections as AI infrastructure becomes larger and more complex.

The transaction follows another significant optical technology acquisition. Earlier this year, Marvell completed its multibillion-dollar purchase of Celestial AI, a startup focused on optical interconnect technology. Buying Lumentum would substantially extend that push.

The deal arrives as investors question whether the pace of AI infrastructure spending can continue and how quickly those investments will generate sufficient returns. Marvell is committing to expansion while that debate weighs on technology stocks.

Both companies have benefited from enthusiasm for AI. Marvell's market value has more than tripled over the past three years, while Lumentum shares have more than doubled in 2026. Their initial trading response was negative. Marvell shares fell about 3% and Lumentum declined roughly 4% before the opening bell. Those early moves preceded larger declines after trading began.