Marvell to buy Lumentum in $115bn AI deal

US chipmaker Marvell Technology said Monday it will buy optical components maker Lumentum in a $115 billion all-stock deal, a major merger in AI infrastructure as investors question whether the sector's spending boom will pay off.

The companies said the transaction is expected to close in the first half of 2028. Marvell shareholders are set to own about 67 percent of the combined company.

Marvell's share price fell as much as 8 percent after the announcement, while Lumentum shares were down 12.5 percent.

The deal would give Marvell, which designs networking chips and custom processors, control of Lumentum's lasers, optical transceivers and optical switching technology. The companies said rising AI data traffic and the physical limits of copper wiring are pushing data centers toward optical connections.

Nvidia invested $2 billion in each of Marvell and Lumentum earlier this year as part of a wider push to invest across the AI industry.