Marvell Technology on August 19 disclosed a sweeping expansion of its custom silicon partnership with Alphabet's Google, agreeing to develop chips and components for Google's AI infrastructure and issuing Google a warrant to buy up to $12.2 billion of Marvell stock.
Warrant terms: 58.97M shares at $206.58
The warrant gives Google the right to purchase up to 58,970,907 Marvell shares at $206.58 each — a strike worth $12.18 billion if fully exercised. Vesting is tied to Google hitting purchasing targets through Marvell's fiscal 2033, meaning the option acts as both a supply-side commitment and a long-dated equity tie-up. If fully exercised, Google would become Marvell's fifth-largest investor.
$120B revenue potential through 2033
The deal could bring Marvell roughly $120 billion in revenue through fiscal 2033 if Google hits the purchasing targets. It covers a broad range of technologies used alongside Google's tensor processing units, spanning AI compute silicon, data-storage controllers and networking chips — effectively repositioning Marvell as a full-stack custom-silicon supplier for Google Cloud.
Shares pop 8%; Broadcom slides 5%
Marvell shares jumped nearly 8% on the news, while Broadcom — the incumbent lead partner on Google's TPU roadmap — fell more than 5%. Morningstar analyst William Kerwin called it "a big win for Marvell" while adding that the deal reads more as "a growing pie at Google for new sources, rather than a competitive displacement of Broadcom." Alphabet shares were little changed.
Big Tech doubles down on equity-linked chip deals
The Marvell-Google warrant is the latest in an accelerating pattern of hyperscaler-chipmaker equity entanglements. Last week Nvidia agreed to backstop up to $105 billion for an OpenAI data-center lease in Ohio. Last October, AMD gave OpenAI a warrant for up to roughly 10% of AMD's shares as part of a multibillion-dollar GPU supply pact. The Marvell warrant follows the same template — long-term chip supply commitments underwritten by conditional equity.
Why Google needs more custom silicon
Demand for in-house AI accelerators like Google's TPUs has surged as cloud customers push for cheaper inference alternatives to Nvidia GPUs. A recent restructuring of Google's AI division shifted more decision-making toward executives with strong ties to Google Cloud, elevating the strategic importance of custom silicon and AI infrastructure to the parent company's growth story.
Reporting based on coverage from Reuters (via Yahoo Finance), CNBC and Bloomberg.