Marvell Technology has offered Google a warrant to buy up to $12.2 billion worth of its shares as part of a major custom artificial intelligence (AI) chip partnership, giving the search giant a potential foothold among Marvell’s biggest investors.
The deal will see Marvell help develop Google’s custom chips used to power AI workloads. If Google meets the targets linked to the warrant, the partnership could generate about $120 billion in revenue for Marvell through fiscal 2033.
Marvell shares rose nearly 8% after the announcement, while its larger rival Broadcom’s shares fell more than 5%. Alphabet shares were little changed.
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Google Can Take $12.2 Billion Marvell Stake
Under the agreement, Google will receive a warrant to buy up to 58.97 million Marvell shares at $206.58 each. If fully exercised, the stake would be worth about $12.18 billion, making Google Marvell’s fifth-largest investor.
The partnership covers a broad range of technology used alongside Google’s Tensor Processing Units (TPUs). These include processors that run AI models, systems that handle data storage and technology used to move information across networks.
The arrangement comes as demand for custom AI chips grows. Companies are looking for alternatives to Nvidia’s expensive graphics processors, particularly for AI inference, where trained models generate responses and perform tasks.
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Marvell Takes Aim at Custom AI Chip Market
The agreement could strengthen Marvell’s position in the fast-growing custom AI chip market, although analysts cautioned against viewing it as an immediate replacement for Broadcom.
Broadcom has been Google’s main custom chip partner. Morningstar analyst William Kerwin described the agreement as a major win for Marvell but said it appeared to represent additional chip demand from Google rather than a direct displacement of Broadcom.
The deal also highlights how closely Big Tech companies and chipmakers are becoming linked as spending on AI infrastructure accelerates.
Google’s recent AI division restructuring, which gave greater influence to executives with closer links to Google Cloud, has also increased focus on custom chips and the infrastructure needed to run AI services.
Similar arrangements are emerging elsewhere. AMD agreed to supply OpenAI with AI chips worth tens of billions of dollars in annual revenue while giving the ChatGPT maker an option to acquire roughly 10% of AMD. Nvidia has also agreed to provide up to $105 billion in financial backing for a data-centre project leased by OpenAI.
The Marvell-Google agreement shows that the next phase of the AI chip race may not be decided by Nvidia alone. Custom silicon, cloud infrastructure and long-term partnerships are increasingly becoming as important as raw computing power.
Samarjit Kaur is a journalist and communications professional covering technology & emerging digital trends. With a focus on clarity and context, she reports on developments shaping industries and governance. When not reporting, she chooses to plug-in and relax on her playlists and plan her next bucket-list trips!
