Three Optical Startups Now Priced Above Marvell's Entire $3.25 Billion Fabric Purchase
CScale's $145 million stealth exit on 30 September, with NVIDIA and Intel Capital as first strategic investors, is the third optical interconnect round since August to clear the $3.25 billion Marvell paid upfront for Celestial AI. Marvell's earnout, worth up to $2.25 billion more, now runs against rivals with shipping products and a sponsor selling its own switches.
Vincent Jiang · 3 min read
A Cisco hardware chief reappears, bankrolled by NVIDIA and Intel
Martin Lund ran the Cisco group covering silicon, hardware systems and optics until he left this year. On 30 September he surfaced in Palo Alto with CScale, founded in 2023 and roughly 85 people strong, exiting stealth on a $145 million Series C that takes total funding to $188 million, with NVIDIA and Intel Capital joining as first strategic investors 1. Lund says CScale will integrate lasers onto the chip so a failed laser never interrupts data flow, with chips shipping by 2028 2. The slogan is blunt: "Lasers will fail. Compute shouldn't." 1
Venture now marks three rivals above Marvell's purchase price
On 2 December 2025, Marvell agreed to pay at least $3.25 billion in cash and stock for Celestial AI, whose Photonic Fabric links AI accelerators 3. Since August, three private rivals have been marked above that entire figure: Lumilens, at $5.51 billion on 6 August, already shipping into a hyperscaler's production data centers under a multi-billion-dollar agreement 4; Ayar Labs, at $3.75 billion, which added $150 million on 10 September 5; and Lightmatter, at $4.4 billion 6. Celestial itself last carried a $2.5 billion mark, in March 2025 3.
Three private fabrics carry marks above Marvell's entire purchase price
Data
| Value | |
|---|---|
| Lumilens (Aug 2026) | $5.51B |
| Lightmatter (Oct 2024) | $4.4B |
| Ayar Labs (Mar 2026) | $3.75B |
| Marvell paid for Celestial | $3.25B |
NVIDIA sits on every side of the table
Between March and May, NVIDIA committed at least $6.5 billion to photonics: $2 billion each into Coherent, Lumentum and Marvell itself, up to $3.2 billion into Corning, and a slice of Ayar's Series E 6. It has shipped its own co-packaged optics switches, Quantum-X and Spectrum-X Photonics, since March 2025 6. On 30 September it added CScale 1. NVIDIA holds a stake in the buyer, the challengers and the switch that could make the whole fight optional.
NVIDIA's biggest named photonics cheque is Corning's, at up to $3.2 billion
- Equity commitment
- Estimate
Data
| Equity commitment | |
|---|---|
| Corning (estimate) | $3.2B |
| Coherent | $2B |
| Lumentum | $2B |
| Marvell | $2B |
The earnout and the guidance share one calendar
Marvell closed the deal in February, using $1 billion of cash and issuing about 27 million shares 7. At close it guided Celestial revenue to begin in the second half of fiscal 2028, reach a $500 million annualized run rate in that fourth quarter, and double to $1 billion by the fourth quarter of fiscal 2029 7. The full $5.5 billion payout requires $2 billion of cumulative revenue by the end of fiscal 2029 3. The gap lands on one balance sheet.
The bull case does not name a fabric customer
Data center revenue rose 46 percent to $2.17 billion last quarter, 79 percent of sales 8. Cantor Fitzgerald, holding a $330 target, sees a $625 billion data center opportunity by 2030 8. The deal announcement quoted an AWS vice president praising the purchase, but neither it nor the close named a customer 37. Lumilens went from founding to hyperscaler revenue in two years 4; Marvell's fabric has a schedule without an announced buyer.
Marvell's revenue has climbed for nine straight quarters, to $2.74 billion
Data
| Revenue | |
|---|---|
| Q3 '23 | $1.42B |
| Q4 '23 | $1.43B |
| Q1 '24 | $1.16B |
| Q2 '24 | $1.27B |
| Q3 '24 | $1.52B |
| Q4 '24 | $1.82B |
| Q1 '25 | $1.9B |
| Q2 '25 | $2.01B |
| Q3 '25 | $2.08B |
| Q4 '25 | $2.22B |
| Q1 '26 | $2.42B |
| Q2 '26 | $2.74B |
At Investor Day, listen for one number
Marvell presents at its Investor Day on 6 October, where Morgan Stanley expects fiscal 2030 revenue framed above $40 billion 8. The tell is smaller and nearer: a shipping part or a named design win for Photonic Fabric. Every quarter without one pushes the 2029 earnout deadline toward switches NVIDIA already ships, and still funds.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
