Most of the attention in artificial intelligence goes to the chips that do the thinking. One of the biggest deals of the year is about something less glamorous: how the data gets from one chip to the next.
Marvell Technology agreed on Nov. 2 to buy Lumentum, a San Jose maker of optical components, in an all-stock deal valued at about $115 billion. Lumentum shareholders will receive 4.5 Marvell shares for each share they own, worth roughly $1,132 a share when the deal was announced. That is a premium of about 24 percent over Lumentum’s price before word of the talks leaked in late October.
Why Marvell wants it
Modern AI systems link thousands of processors, and copper wiring cannot carry data between them fast enough. The industry is switching to light, sent through optical fiber. Lumentum makes the lasers and optical parts that do that work. Marvell makes the data-center chips on either end.
Marvell says the combination should save more than $1 billion a year. The price is more than ten times the size of anything the company has bought before.
What happens next
The deal needs approval from antitrust regulators and from the shareholders of both companies. When it closes, Lumentum’s investors will own about one-third of the combined company.
For everyone else, the deal is a measure of how much money is still flowing into the AI buildout, even in a month when investors have begun to ask whether all of it will pay off.