Washington (United States) (AFP) - US chipmaker Marvell Technology said Monday it will buy optical components maker Lumentum in a $115 billion all-stock deal, the latest bid for scale among AI infrastructure companies as investors increasingly question whether the industry’s spending boom will pay off.

The deal, among the largest technology mergers on record, comes days after a selloff that hammered shares of companies tied to artificial intelligence.

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

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

The tie-up would give Marvell, which designs networking chips and custom processors, control of Lumentum’s lasers, optical transceivers and optical switching technology.

The companies said surging data traffic from AI systems and the physical limits of copper wiring are driving data centers toward optical connections.

The deal also strengthens Marvell’s position against larger rival Broadcom, which offers customers a wider range of AI data center hardware from a single supplier.

AI chip giant Nvidia, the world’s most valuable company, invested $2 billion in each of the two companies earlier this year as part of a broader push to invest its profits across the AI industry.

“AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation,” Marvell chairman and chief executive Matt Murphy said.

“The companies that move first and help define this transition will set the standard for decades to come,” he added.