Marvell Technology has granted Google a stock warrant worth up to $12.2 billion — one of the largest customer-equity awards ever tied to a chip supply deal — after signing a $120 billion, seven-year commercial agreement to co-develop custom silicon for Google's tensor-processing-unit (TPU) ecosystem. Marvell disclosed the arrangement on August 19, 2026, sending its shares up more than 11% in premarket trading while rival Broadcom, historically Google's main custom-silicon partner, fell over 5%.
Deal Mechanics
The warrant lets Google buy up to 58.97 million Marvell shares at an exercise price of $206.58, exercisable until August 18, 2033. It vests in tranches: one installment for every $500 million Marvell earns from Google, adding up to $120 billion in potential custom-chip purchases through January 2033. A stake of that size would make Google Marvell's fifth-largest investor and effectively locks Marvell in as a strategic supplier for hyperscale AI infrastructure.
What The Chips Do
The commercial contract, signed on July 29 and now backed by the equity sweetener, covers a broad menu of custom devices designed to plug into Google's TPU stack: AI inference accelerators, storage controllers, network interface controllers, and memory interface controllers. It ties Marvell's ASIC design services and its 800G/1.6T optical DSP portfolio directly to Google's data-center roadmap — a critical hedge for Alphabet as it scales past the Blackwell generation of merchant GPUs.
Strategic Fallout
Broadcom shipped Google's TPU v5e and TPU v6 designs and has treated its custom-ASIC franchise as a franchise business. Diverting a slice of TPU-adjacent silicon to Marvell chips away at that moat and puts Google in a two-supplier position for its most important silicon roadmap. It also validates Marvell's pivot into the AI custom-chip market alongside its existing storage and networking franchises, joining the wave of hyperscaler custom-silicon deals that includes the NVIDIA/SK Group Vera Rubin AI factory and Anthropic's model-hardware standard.
Reporting based on coverage from Reuters, CNBC, Bloomberg and Yahoo Finance.