Marvell has granted Google an option to acquire a US$ 12.2 billion stake in their custom AI chip collaboration.
Marvell Technology has offered Google a warrant to purchase up to $12.2 billion worth of its shares as part of a major custom artificial intelligence (AI) chip partnership, potentially positioning the search giant among Marvell’s largest investors.
Under the agreement, Google will receive a warrant to buy up to 58.97 million Marvell shares at $206.58 per share. If fully exercised, the stake would be valued at approximately $12.18 billion, making Google Marvell’s fifth-largest investor.
The partnership will see Marvell assist in developing Google’s custom chips designed to power AI workloads. Should Google meet the performance targets tied to the warrant, the collaboration could generate roughly $120 billion in revenue for Marvell through fiscal 2033.
The arrangement encompasses a broad suite of technologies that complement Google’s Tensor Processing Units (TPUs). This includes processors optimized for running AI models, systems for managing data storage, and networking technologies designed to facilitate high-speed information transfer.
Market reaction was immediate: Marvell shares climbed nearly 8% following the announcement, while larger rival Broadcom fell more than 5%. Alphabet’s stock remained largely unchanged.
The deal arrives amid surging demand for custom AI chips, as companies seek cost-effective alternatives to Nvidia’s premium graphics processing units (GPUs), particularly for AI inference—the stage where trained models generate responses and execute tasks.
While the agreement could solidify Marvell’s foothold in the rapidly expanding custom AI chip market, analysts cautioned against interpreting it as an immediate threat to Broadcom. Broadcom has historically served as Google’s primary 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 partnership also underscores the deepening integration between Big Tech firms and semiconductor manufacturers, driven by accelerating investments in AI infrastructure. Google’s recent restructuring of its AI division, which elevated executives with stronger ties to Google Cloud, has further intensified the company’s focus on custom silicon and the underlying infrastructure required to support AI services.
Similar strategic alignments are emerging across the industry. AMD recently agreed to supply OpenAI with AI chips projected to generate tens of billions in annual revenue, alongside granting the ChatGPT developer an option to acquire roughly 10% of AMD. Meanwhile, Nvidia has committed up to $105 billion in financial backing for a data center project leased by OpenAI.
Ultimately, the Marvell-Google agreement signals that the next phase of the AI chip competition may not be dominated by Nvidia alone. Custom silicon, cloud infrastructure, and long-term corporate partnerships are increasingly proving as critical as raw computational power.
Samarjit Kaur is a journalist and communications professional covering technology and emerging digital trends. With a focus on clarity and context, she reports on developments shaping industries and governance. When not reporting, she enjoys relaxing to her playlists and planning future bucket-list travels.