How much longer will the AI-inspired data center construction frenzy continue? Marvell just put down a sizable wager that there's plenty to room left to grow.
Marvell agreed to acquire optical components maker Lumentum Monday for $115 billion in an all-stock deal, which is the biggest deal in tech history that didn't involve Elon Musk. Lumentum makes optical networking components that accelerate the movement of data packets across clusters of servers, which can be a bottleneck for AI workloads managed by traditional networking components.
"As AI infrastructure scales to increasingly complex architectures, particularly scale-up and scale-in, the industry is shifting from discrete, modular components toward highly integrated optical solutions that require much closer co-design of electrical and optical technologies to deliver greater bandwidth, performance and energy efficiency," Marvell said in a press release announcing the deal.
But the size and timing of this deal also has the potential to make history, and not in the way either company would like. Shares of Marvell fell more than 12% on Monday on concerns that the data-center boom could falter over the next year amid a number of challenges for the industry.
