Marvell Technology has struck a landmark deal with Google, agreeing to help develop the tech giant's custom AI chips while granting Alphabet's Google a warrant to purchase up to 58.97 million Marvell shares at $206.58 each — a stake worth approximately $12.18 billion if fully exercised.
The deal, announced August 19, sent Marvell shares surging more than 11% in premarket trading, while larger rival Broadcom — Google's primary custom chip partner — fell over 2%. Most of the warrant becomes available only if Google meets agreed purchasing targets through fiscal 2033, linking the potential stake size to actual chip purchases over time.
The agreement covers a broad range of chips and related technologies designed to work with Google's TPU ecosystem, which underpins much of the company's AI infrastructure. Demand for in-house chips like Google's tensor processing units has surged as companies seek cheaper alternatives to Nvidia's graphics processors and technologies better suited for running trained AI models.
The tie-up comes just weeks after Big Tech companies reinforced expectations that they would spend more than $700 billion on AI infrastructure this year — an unprecedented sum marking a major increase from last year's $400 billion. If fully exercised, the warrant would make Google Marvell's fifth-largest investor, according to LSEG data.
Marvell faces stiff competition from Broadcom, which signed a long-term agreement with Google to develop and supply future generations of custom AI chips through 2031. The new Marvell deal signals Google's strategy to diversify its chip supply chain as AI compute demand continues to accelerate.
