Marvell to buy Lumentum in $115 billion deal in AI data-center bet

Marvell Technology announced on Monday a $115 billion acquisition of Lumentum Holdings, one of the most significant tech industry deals ever. The merger will position Marvell as a category leader in AI connectivity, according to the company. Marvell, founded in 1995, specializes in data infrastructure semiconductor products. AI infrastructure is undergoing a fundamental shift towards optical connectivity, presenting a unique opportunity, as stated by Marvell CEO Matt Murphy.

Nvidia had previously invested $2 billion in Lumentum. Despite recent setbacks in the AI sector, Marvell believes the investment remains justified. However, markets remain skeptical, with Marvell shares dropping over 1% and Lumentum falling almost 3% following the news. The merger aims to combine the companies' complementary technologies and engineering expertise to offer an end-to-end system catering to a wider customer base.

The deal, contingent on shareholder approval, is anticipated to close in the first half of 2028. This acquisition unfolds amid a surge in data center construction, which has sparked controversies across the nation.