Marvell Technology on Monday said it will buy optical components maker Lumentum to address growing connectivity demands from the artificial intelligence infrastructure buildout.
"AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation," said Marvell Chairman and CEO Matt Murphy in a release. "The companies that move first and help define this transition will set the standard for decades to come."
Since the tie-up is a fixed ratio deal with no cash, the value will depend on the price of Marvell shares. The company said the transaction has an implied enterprise value of $115 billion for Lumentum, in a release.
Through the acquisition, Marvell said it can combine electrical and optical technologies to meet accelerating and shifting AI connectivity demands across regions and systems. Companies are increasingly relying on optical connections to piece together chips used to run and train large language models.
Lumentum shareholders will receive 4.5 Marvell shares for each Lumentum share under the agreement. The deal is expected to close during the first half of 2028.
Marvell's takeover marks one of the most significant bets on AI in 2026 and comes despite recent concerns over the long-term sustainability of infrastructure spending.
This isn't the company's first bet on AI growth. This year, the company closed a multibillion-dollar deal for Celestial AI, a startup focused on optical interconnectivity technology.
Marvell has seen its market value more than triple over the last three years, buoyed by unrelenting AI enthusiasm. Lumentum's stock has more than doubled in 2026 alone.
Marvell shares slumped 3%, while Lumentum's stock declined about 4% before the bell.