Marvell Technology, Inc. (MRVL.US) plans to invest $5 billion to acquire Celestial AI and bet on breaking the "memory wall" with photon interconnect.

According to informed sources, American chip manufacturer Marvell Technology, Inc. is in deep negotiations to acquire chip startup company Celestial AI in a cash and stock deal worth billions of dollars. Sources stated that the total transaction price, including product milestone earnings, could exceed $5 billion, and they added that the deal could be announced as early as December 3. Marvell Technology, Inc. is a network chip manufacturer with a market value of $78.54 billion, competing with larger rival Broadcom Inc. in custom chip and network businesses. The potential acquisition of Celestial AI will enhance Marvell Technology, Inc.'s product portfolio, highlighting the market's strong demand for computing power. Celestial AI, backed by a subsidiary of AMD, raised $250 million in venture capital in March, bringing its total funding to $515 million. The company has Intel Corporation CEO Liwu Chen on its board and is using photonic technology (which uses light instead of electrical signals) to establish high-speed connections between AI computing chips and memory chips. Addressing the "memory wall" crisis Celestial AI is developing the Photonic Fabric optical interconnection platform to address the "memory wall" bottleneck in today's AI computing architectures. By leveraging optical interconnections, Celestial AI offers a high bandwidth, low latency, and low power solution to support AI accelerators from on-chip to multi-rack deployments. Faced with massive AI model architectures, where parameterized data is exploding in memory, the memory wall has become the biggest obstacle to system performance scalability as computational units (CPUs, NPUs, etc.) and memory (DDR, HBM) data access speeds are severely mismatched. While hardware stacking can mitigate this issue for smaller parameter scales, when the model's parameters expand to trillions, the computational ability of the computing units is severely hampered by low memory bandwidth and high latency, significantly reducing system efficiency. Celestial AI's Photonic Fabric optical interconnection platform, like other industry players focusing on interconnectivity, aims to address the bottleneck between computing and memory. The company has completed multiple rounds of financing, raising over $515 million. With numerous capital investments, AMD and Intel Corporation are eager to break NVIDIA Corporation's NVLink closed circle and extend their computing chips to a new optical interconnect realm. Samsung, as a global leader in HBM and DDR production, needs Celestial AI's memory pool expansion for its commercial model. Through the acquisition of Celestial AI, Marvell has obtained a "future ace." If optical interconnection technology becomes the standard configuration for the next generation of AI servers (as widely expected in the industry), Marvell will have core IP, greatly increasing its leverage in competing for the next generation orders from cloud giants such as Microsoft Corporation and Alphabet Inc. Class C.