Marvell agrees to buy optical-components maker Lumentum in a $115 billion all-stock deal
The custom chipmaker is betting that AI data centers will keep needing more optical connections, despite investor doubts about AI spending.
Marvell Technology is buying Lumentum, which makes optical components, in an all-stock deal valued at $115 billion including debt, the companies announced Monday. It is one of the largest deals of 2026. The acquisition strengthens Marvell's challenge to its larger rival Broadcom in custom chips for AI infrastructure. Lumentum makes photonic products, including high-performance lasers, used to move data at high speeds. It is roughly half Marvell's size. "AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation," said Marvell CEO Matt Murphy. He will remain chairman and CEO of the combined company. The deal is a bet that spending by large tech companies on AI will keep demand for optical components ahead of supply for years. Investors were cautious. Lumentum shares fell 6.5% before the market opened, and Marvell shares fell 2.3%. Both stocks have dropped sharply since talks were first reported late last month, amid concerns about an AI bubble. The deal comes as AI infrastructure spending faces closer scrutiny over tightening margins and slowing cash flow, which has set off a sell-off in chip stocks.