marvel technologyTransactions with optical component manufacturers lumen Lumentum CEO Michael Hurlston told CNBC on Monday that building out artificial intelligence infrastructure will create a “huge” opportunity to address growing connectivity demands.
“We need scale-up technology that allows semiconductors and optics to work together seamlessly,” he told CNBC’s “Squawk on the Street.” “We are creating a new category of company here.”
The partnership is a non-cash, fixed-ratio transaction, so its value is determined by the price of Marvell stock. The company said in a release that the transaction implies an enterprise value of $115 billion for Lumentum.
Marvell stock fell 8% in Monday trading, while Lumentum stock fell 13%.
Through the acquisition, Marvell said it will be able to combine its electrical and optical technologies to meet the accelerating and changing demand for AI connectivity across regions and systems. Companies are increasingly relying on optical connectivity to power together chips used to run and train large language models.
“We’re actually going to build solutions around sticky solutions, but the reason we’re selling out is because demand is exploding, and we don’t think that’s going to change anytime soon,” Marvell CEO Matt Murphy said.
Under the agreement, Lumentum shareholders will receive 4.5 Marvell shares for each Lumentum share. The deal is expected to close in the first half of 2028.
Marvell’s acquisition represents one of the most important bets on AI in 2026, and comes despite recent concerns about the long-term sustainability of infrastructure spending.
This isn’t the first time the company has bet on the growth of AI. This year, the company signed a multibillion-dollar deal with Celestial AI, a startup focused on optical interconnect technology.
marvelMurphy also dismissed concerns about Nvidia’s circular trading, given recent multibillion-dollar investments in both companies by major AI chipmakers.
To further support its data center infrastructure to house AI chips, Nvidia is positioning itself as a central cog in a network of related companies, investing in several technology companies that it buys into Neocloud, which rents chips and computing power. This has led to criticism that companies like Nvidia are effectively raising money by acquiring customer stock.
“This is a double-whammy of supporting Nvidia, which is an ecosystem leader in this space,” Murphy told CNBC. “We are very committed to that partnership, and I think it will be a great benefit for them to have two major suppliers that support that ecosystem together.”
Marvell has more than tripled in market value over the past three years, driven by continued enthusiasm for AI. Lumentum’s stock price more than doubled in 2026 alone.
Correction: This article has been updated to reflect that Lumentum CEO Michael Hurlston called the deal a “huge” opportunity. A previous version of this article incorrectly cited Marvell’s CEO.
