By Hamza Faisal
Marvell Technology is in advanced talks to buy Lumentum Holdings, the data-center optics maker worth about $83 billion, in what would be one of the biggest deals of the artificial-intelligence infrastructure boom. Bloomberg News reported the discussions on Wednesday, citing people familiar with the matter, and said a deal could be announced as soon as next week — though no final agreement has been reached and the talks could still fall apart.
The market reacted instantly. Lumentum shares jumped about 11% in extended trading after the report, while Marvell shares fell more than 8% — the classic split when investors suspect the buyer is about to pay a rich price. Neither company immediately responded to requests for comment.
Why Marvell wants the lasers
The logic is the plumbing of the AI data center. Lumentum makes the lasers, photonic integrated circuits and high-speed transceivers that move data between graphics processors inside AI clusters. As those clusters grow, the industry is shifting away from copper connections for GPU-to-GPU links and toward light — and Marvell, which already buys lasers from Lumentum, would own both sides of that connection, pairing its digital signal processors with Lumentum's optics.
Marvell has emerged as one of the biggest beneficiaries of the AI spending boom: its shares have nearly tripled this year on demand for its custom AI chips and networking products, and earlier this month it raised its fiscal 2028 revenue forecast to $20 billion from $15 billion. Buying Lumentum would deepen that bet — and put Marvell in direct control of a supply chain its rivals also depend on.
The awkward shareholder in the room
One complication sits in Lumentum's shareholder register: Nvidia, which is both a customer of Lumentum and a $2 billion shareholder since March. A Marvell takeover would hand one of Nvidia's custom-silicon rivals control of an optical supplier Nvidia itself relies on — a dynamic that could draw attention from regulators and from customers alike.
Marvell also has history here. Late last year it struck a $3.25 billion deal for photonics firm Celestial AI, a move analysts at Bernstein said already signalled its push into optical technologies. A Lumentum deal would be vastly larger — and harder to digest.
Paying for an $83 billion deal
The money is the hardest part. Marvell is worth about $221 billion, but it held only about $3.92 billion in cash and equivalents as of its latest quarter. Bernstein analysts noted that an acquisition of this size would likely be impossible to fund entirely with cash, pointing to a large stock component — or a heavy borrowing — if the deal goes ahead.
For now, the talks remain private and unfinished. But the report alone has already repriced both companies, and if Marvell does announce a deal next week, it would rank among the largest AI infrastructure acquisitions ever — a bet that in the age of AI, whoever controls the light between the chips controls the data center.
