Marvell will develop custom AI chips for Google and, at the same time, offer the tech giant the opportunity to purchase up to $12.2 billion in shares. Marvell’s stock rose more than 11 percent, while Broadcom, Google’s most important chip partner to date, fell more than 2 percent.
The partnership centers on a broad range of chips and related technologies designed to integrate with Google’s TPU ecosystem. That ecosystem forms the foundation of virtually the company’s entire AI infrastructure. It includes, among other things, AI inference accelerators, storage controllers, network interface controllers, and near-memory compute.
Google will receive an option to purchase up to 58.97 million Marvell shares at $206.58 per share. If fully exercised, that package would be worth about $12.18 billion, according to Reuters’ calculations. This would make Google Marvell’s fifth-largest shareholder.
But Google won’t receive that stake just like that. The option will only become largely available if Google meets pre-agreed purchase targets through the 2033 fiscal year. The first year involves approximately 1.36 million shares; the remainder will be released in increments tied to cumulative revenue of $500 million from Google’s purchases. The more Google buys from Marvell, the larger the stake it can build.
Broadcom holds onto its contract
Marvell faces stiff competition in this arena. Broadcom signed a long-term agreement with Google to develop and deliver future generations of custom AI chips and components for the company’s AI racks, with a term extending through 2031.
The agreement comes just weeks after major tech companies once again revised their expectations for AI infrastructure. Together, they are expected to spend more than $700 billion this year, up from $400 billion last year.
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