Marvell is spending $3.25 billion to acquire Celestial AI, and this deal is no simple matter—$1 billion in cash plus $2.25 billion worth of stock bundled together, with the transaction expected to close in the first quarter of next year.

Who is Celestial AI? A major player in photonic interconnect technology. Their technology offers energy efficiency twice as fast as traditional copper cables, with latency down to the nanosecond level. Even more impressive is their thermal stability—they can operate reliably in extreme high-temperature environments like multi-kilowatt XPUs, which is a notorious cooling challenge for data centers. Their first photonic chip delivers bandwidth up to 1.6T, making these performance numbers truly hardcore.

The arms race in computing power just gained a new variable, as real money is now being invested in the photonic computing path.