Dec 2 (Reuters) - Chipmaker Marvell Technology said on Tuesday it will buy semiconductor startup Celestial AI in a deal worth $3.25 billion and also forecast fourth-quarter revenue above Wall Street estimates.

Marvell's ( MRVL ) shares were down 6% in extended trading.

The generative AI boom has sped up chipmakers' development process, as they rush to design the fastest, most energy-efficient equipment for advanced data centers. 

The deal would allow Marvell ( MRVL ) to tap into the startup's work on photonics, which uses light rather than electrical signals to create connections between AI chips and memory chips, an area where it competes with Broadcom and the world's most valuable company Nvidia. 

Under the terms of the deal, Celestial AI will receive $1 billion in cash and 27.2 million shares of Marvell ( MRVL ) common stock, having a value of $2.25 billion.

Marvell ( MRVL ) said it expects to see meaningful revenue contributions from Celestial AI to begin in the second half of fiscal 2028, reaching $500 million in annualized run rate in the fourth quarter of fiscal 2028 and doubling to a $1 billion dollar run rate by the fourth quarter of fiscal 2029.

Marvell ( MRVL ) projected revenue of around $2.20 billion, plus or minus 5%, for the fourth quarter, compared with the analysts' average estimate of $2.18 billion, according to data compiled by LSEG.