Google Marvell deal grants $12.2 billion warrant as tech giant diversifies AI chip suppliers

Google pits Marvell against Broadcom as it chases AI crown

It's an open secret that the major cloud providers don't actually design their custom silicon from scratch. There's not much value in reinventing the wheel, so they often outsource big and undifferentiated chunks of chip design to IP houses like Broadcom, Marvell, Arm, and others. Google's partner of choice for its Tensor Processing Units (TPUs) has largely been Broadcom -- though the chip giant's involvement was only made public earlier this year. However, Google's relationship with Broadcom was apparently never monogamous. In an SEC filing this week, Marvell entered the chat, announcing that the Chocolate Factory had tapped the IP house to develop custom silicon for the search and advertising giant. Among the products slated for development were "custom silicon programs that attach to the TPU ecosystem" including AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near memory compute. The SEC filing doesn't go into specifics as to which technologies Google will adopt, nor does it offer any insights into the cloud provider's relationship with Broadcom. All of the technologies listed in the filing are ones Broadcom is more than capable of furnishing. It also doesn't mean that Broadcom will stop building TPUs for Google, it simply means Google isn't putting all its eggs in one IP basket. It's not unusual for cloud providers to acquire technologies from multiple vendors to ensure they're always getting the best deal. Networking is a prime example. Of course that didn't stop Wall Street from dumping shares of Broadcom Wednesday, sending its stock price down about 4% as of late afternoon trading. Marvell clearly expects this deal to be a major revenue driver for the company going forward, and it issued Google a warrant to acquire nearly 59 million shares worth roughly $12.2 billion. Whether Google will actually exercise the warrant is an open question. Doing so would embroil the company in a years-long chip design collaboration. But, looking at Marvell's tech stack, it's not hard to see why Google might be interested. Over the past few years, Marvell has developed a comprehensive suite of hardware IP, including high speed SerDes used in network switches and NICs, multi-die XPU reference designs, CXL memory controllers, and silicon photonics interconnect. Google could have licensed all these things from Broadcom, but now they're in a position to pit the two companies against each other on price and performance. So where might we see Marvell's tech appear first? If we had to guess, Google's interest in Marvell may stem from the photonic memory tech it acquired from Celestial AI late last year. Unveiled earlier this month, Marvell's new Photonic Fabric NIC and Photonic Fabric chiplet technologies allow multiple racks up to 50 meters away to share a common memory pool. Google's TPUs rely on high-speed optical circuit-switched links to talk to one another. One could imagine Google using this tech to dynamically reallocate additional memory to different TPU clusters based on the workload rather than needing to attach memory in a fixed ratio. And because the link is optical, the memory in question doesn't need to be in the same system or rack; that memory becomes a fungible resource. Of course, this is all speculation. Marvell has no shortage of IP that Google might be interested in, including SSD and CXL controllers and XPU reference designs. Or could simply be that Alphabet CEO Sundar Pichai wants to avoid becoming overly reliant on Broadcom lest Hock Tan get any ideas like hiking up prices the way he did on virtualization tech following the VMware acquisition. Or could be that Marvell's tech is just better for the specific use cases Google is currently developing for. ®

Marvell pops 6% on AI chip deal that lets Google buy up to $12.2 billion in shares

* Marvell Technology stock popped on a deal for Google to buy up to $12.2 billion in shares. * The deal is part of Google and Marvell's partnership on custom chips and includes products that "attach to the TPU ecosystem." * Google has largely been working with Broadcom on custom chips In this article * MRVL * GOOGL Follow your favorite stocksCREATE FREE ACCOUNT watch now VIDEO1:5601:56 Marvell surges after deal allows Alphabet to buy up to $12.2 billion in shares Squawk on the Street Marvell Technology shares rallied 6% on a deal that would allow Google to buy up to $12.2 billion in shares of the chipmaking company, according to a securities filing. The deal, part of Google and Marvell's partnership on custom chips, would allow the tech giant to purchase up to 58,970,907 shares at $206.58 apiece. The stake is tied to purchasing targets through the 2033 fiscal year. Marvell said in a filing that the expanded agreement will include products that "attach to the [tensor processing unit] ecosystem," such as artificial intelligence inference accelerators, and storage and network interface controllers. Read more CNBC tech news In April, Marvell shares popped on a report of a chip deal with Google for artificial intelligence workloads. At the time, The Information reported that the deal would include a TPU and memory processing unit. Google and its megacap competitors, including Amazon, Meta and Microsoft have been working on custom silicon chips for AI workloads in a bid to find cheaper substitutes to Nvidia chips. Over the last decade, Google has largely collaborated with Broadcom on custom chips. The companies expanded that deal in April. Broadcom's stock fell about 5% on Wednesday. Stock Chart IconStock chart icon Marvell and Broadcom stock chart. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Marvell gives Google a $12.2bn share option for buying chips

Marvell has given Google a warrant to buy up to $12.2bn of its shares, unlocked as Google buys its custom AI chips. Marvell jumped as much as 14%, Broadcom fell about 5%, and the deal adds to worries about 'circular' arrangements in the AI chip market. Marvell Technology has agreed to give Google the right to buy up to $12.2 billion of its shares. In return, Google will buy its custom chips. The chipmaker set out the deal in a regulatory filing on Wednesday. Its stock jumped as much as 14 percent on the news. The warrant lets Google buy 58,970,907 Marvell shares at $206.58 each, CNBC reported. That is worth about $12.2 billion if fully exercised. The right is not automatic. Nearly 1.4 million of the shares vest in the first year, according to Bloomberg. The rest come in tranches tied to every $500 million of chips Google buys. The purchasing targets run through Marvell's 2033 fiscal year. If Google hits them, the tie-up could bring Marvell roughly $120 billion in custom-chip sales over that period, Reuters reported. It could also make Google the company's fifth-largest investor. The mechanics tie the stake to spending. Google does not pay cash for the shares up front. Instead, it earns the right to buy them as it places orders, with each $500 million of chip purchases unlocking a further tranche of the warrant. That means the full $12.2 billion only materialises if Google buys a large volume of Marvell silicon over the life of the agreement. What Marvell is building The chips are not Google's main processors, but the parts around them. Marvell said the expanded agreement covers products that "attach to the tensor processing unit ecosystem," such as AI inference accelerators and controllers that handle storage and networking. Tensor processing units, or TPUs, are the in-house chips Google uses to build, train and run AI models. Those custom chips sit at the centre of a wider shift. Google, along with Amazon, Meta and Microsoft, has been designing its own silicon to lean less on Nvidia. The chipmaker's top AI accelerators sell for tens of thousands of dollars each. Demand has been strongest for chips suited to inference, the stage where a trained model is actually run. Google's TPUs are also sold to its cloud customers, which has turned them into a selling point for the wider business. As that demand has grown, so has Google's appetite for the surrounding components, from accelerators to the controllers that move data between chips. Marvell's role is to supply more of that hardware, and the warrant gives it a direct interest in how far Google's custom-chip push goes. Google has leaned on Broadcom for custom chips for most of the past decade, and expanded that partnership in April. Bringing in Marvell adds a second major supplier. William Kerwin, an analyst at Morningstar, told Reuters the deal was "a big win for Marvell." He read it, though, as "a growing pie at Google for new sources, rather than a competitive displacement of Broadcom." How the market reacted The share moves told the story of who investors think won. Marvell rose about 8 percent, after climbing as much as 14 percent earlier in the day. Broadcom, the incumbent, fell around 5 percent as investors weighed a new rival for Google's orders. Alphabet, Google's parent, was little changed on the day. The deal reflects how valuable Google's chip business has become. Alphabet is expected to make about $3 billion from TPU-related infrastructure this year, and $25 billion in 2027. That estimate came from Citizens analyst Andrew Boone earlier this year, in a forecast cited by Bloomberg. A recent reshuffle of Google's AI leadership shifted power towards its cloud business, putting more weight on that infrastructure. The circular-deal question The structure fits a pattern that is starting to worry investors. A growing number of arrangements in the AI industry tie a chipmaker's sales to its customer's own stock or spending. Bloomberg said such "circular" deals have stoked fears of inflated valuations and an AI bubble. This one lands days after Nvidia agreed to backstop up to $105 billion for a data centre that OpenAI is leasing in Ohio. It also echoes a deal from October. Then, AMD agreed to supply OpenAI with chips, and gave the ChatGPT maker an option to buy a stake of up to about 10 percent. The investor Jeff Gundlach recently warned that turning AI chips into an asset class looks like a market top. Marvell's warrants are narrower than an open investment. They are specifically linked to Google, or its affiliates, buying certain custom Marvell chips, Bloomberg said. In effect, Google earns the right to a stake by spending, rather than paying cash for shares up front. Google's playbook The move extends a strategy Google has been running for months, using its buying power to shape its chip supply and reduce its dependence on Nvidia. It has signed capacity and financing deals across the AI supply chain, and the Marvell agreement adds a chip partner with a direct financial stake in Google's success. Marvell first drew attention to a possible Google deal in April, when its shares rose on a report that the two were in talks over a TPU and a memory-processing unit, CNBC noted. The agreement disclosed on Wednesday is broader, and this time it comes with the numbers attached. Whether Google exercises the warrant will depend on how much silicon it ends up buying over the next seven years. Marvell has framed the deal as a way to challenge Broadcom's lead in custom chips. For Google, it is another lever over a supply chain it is trying to control.

Marvell grants Google $12.2 billion stock warrant in AI chip deal

The underlying commercial agreement, signed on July 29, covers a range of chips built to work with Google's tensor processing unit ecosystem, including AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory compute, the company said. Rather than accruing on a fixed schedule, the bulk of the warrant shares unlock only as Google hits cumulative spending thresholds. Of the total 58.97 million shares, about 1.36 million vest in equal quarterly installments during the first year of the agreement, the company said. The remaining shares vest in 240 equal tranches -- one tranche for each $500 million in custom products revenue Marvell records from Google purchases -- running from Marvell's third quarter of fiscal 2027 through the end of fiscal 2033.

Marvell shares jump 9.8% on Google chip design deal

Marvell Technology Inc. today disclosed that it has won a contract to design artificial intelligence chips for Google LLC. The deal also extends to other areas. Notably, Marvell has issued a warrant that will enable Google to purchase about 59 million units of common stock. The shares are worth $12.2 billion. Santa Clara, California-based Marvell is a major supplier of data center chips. Its products can be found in optical networks, storage equipment and the hardware security modules in which companies keep their encryption keys. Marvel also has a sizable custom chip development business. The company stated in a regular filing today that it will help Google develop custom chips "that attach to the TPU ecosystem." TPUs, or Tensor Processing Units, are the proprietary AI accelerators that power the search giant's public cloud. Marvell stated that one of the partnership's priorities will be to develop custom inference chips. The company didn't go into detail. One possibility is that Marvel will help Google develop future iterations of the TPU 8i, an inference-optimized chip that debuted in April. Large language models keep the information they use to answer prompts in a data structure called a KV cache. The TPU 8i can store the KV cache entirely on-chip, which removes the delays associated with moving it to external memory. Additionally, the chip includes a module called CAE that is optimized to speed up chain-of-thought reasoning workloads. Google connects its TPU 8i chips to the other hardware in its data centers via a custom network called Jupiter. According to today's regulatory filing, the company's chip design deal with Marvell will prioritize the development of custom network interface controllers. Those are devices that optimize the flow of traffic between servers and the network of the host data center. Marvell will also help Google develop several other chips. The list includes storage controllers and memory interface controllers, which are used to manage storage arrays and RAM devices, respectively. Additionally, Marvell will develop custom near-memory computing devices. Those are accelerators in which logic circuits and memory modules are placed near each other to reduce latency. Google developed its TPU processor line in partnership with Marvell rival Broadcom Inc. It's unclear how the new chip deal will affect the VMware parent company. In April, Broadcom announced that it has inked a deal to provide Google with AI accelerators and certain related components through 2031. The warrant that Marvell issued in connection with the chip deal will enable the search giant to buy shares for $206.58 apiece. The semiconductor supplier's stock closed at $237 today. An initial $960 million batch of shares is set to vest over the next year, while the remaining $11.4 billion will vest in 240 tranches through fiscal 2033.

Marvell shares jump 8% after chipmaker hands Google option to buy $12.2 billion stake

Marvell shares surged 8% after securing a Google agreement to develop custom AI chips and related technologies. Google received a warrant for up to 58.97 million shares worth about $12.18 billion, strengthening Marvell's position in AI infrastructure. Marvell Technology shares surged 8% after the chipmaker struck a new agreement to help develop Google's custom chips, giving investors another reason to bet on the company's role in the artificial intelligence infrastructure boom. The deal covers a broad range of chips and related technologies designed to work with Google's tensor processing unit, or TPU, ecosystem. TPUs are custom chips used by Google for AI workloads and are a key part of its AI infrastructure. US MarketsPowered By As on 19 Aug 2026, 07:35 PM IST S&P 500 Top Gainers Moderna141.70(125.06%) Estee Lauder Cos98.92(17.38%) Merck & Co149.79(10.82%) Jack Henry & Associates164.70(7.56%) Gainers" S&P 500 Top Losers Coterra Energy32.56(-8.62%) Dell Technologies435.12(-7.15%) CrowdStrike Holdings200.00(-6.07%) Hewlett Packard52.92(-4.97%) Losers" The agreement also gives Google the option to become one of Marvell's largest shareholders. Under the deal, Google received a warrant to buy up to 58.97 million Marvell shares at $206.58 each. If fully exercised, the warrant would be worth about $12.18 billion, according to Reuters calculations. A stake of that size would make Google Marvell's fifth-largest investor, based on LSEG data. Most of the warrant will become available only if Google meets agreed purchasing targets through fiscal 2033. That means Google's potential stake in Marvell is tied to how much business it gives the chipmaker over time. The deal comes as Big Tech companies are sharply increasing spending on AI infrastructure. Large technology companies are expected to spend more than $700 billion on AI infrastructure this year, compared with about $400 billion last year. Demand for custom AI chips has been rising as companies look for cheaper and more specialised alternatives to Nvidia's graphics processors. Custom chips such as Google's TPUs are also seen as better suited for certain AI inference workloads, where trained AI models are used to deliver results. For Marvell, the Google deal strengthens its position in the market for custom silicon and AI infrastructure components. The company has been trying to expand beyond traditional networking and storage chips into higher-growth areas linked to cloud computing and AI. The market reaction shows investors see the agreement as more than a normal supply deal. Google's warrant gives it a direct financial interest in Marvell if purchasing targets are met, while Marvell gets a deeper relationship with one of the biggest AI infrastructure spenders in the world. Marvell still faces strong competition from Broadcom, which already has a long-term agreement with Google to develop and supply future generations of custom AI chips and other components for Google's next-generation AI racks through 2031. That competition will remain a key risk. But the rally in Marvell shares suggests investors believe the company now has a larger seat at the AI chip table.

Broadcom Rival Marvell Surges After Google Strikes AI Chip Deal, Gets Option to Buy $12.2B Stake - Marvel

Marvell Technology, Inc. (NASDAQ:MRVL) is up more than 5% Wednesday after revealing a sweeping custom chip agreement with Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) that could sharply expand its role in Google's artificial intelligence infrastructure. As part of the deal, Google received a warrant to buy nearly 59 million Marvell shares at $206.58 each, representing an aggregate exercise price of roughly $12.2 billion if fully exercised. Marvell designs semiconductors used in data centers, networking and storage systems, and has become a major supplier of custom chips for cloud companies building their own AI infrastructure. Under the new Google agreement, Marvell will help develop specialized chips used around Google's Tensor Processing Units, or TPUs, its in-house alternative to Nvidia (NASDAQ:NVDA) GPUs for running AI workloads. Google's Warrant Is Tied to How Much Business Marvell Wins Google does not get all the shares at once. Only about 1.4 million vest automatically over the first year. Latest Private Market Opportunities Join 400,000+ Investors The remaining 57.6 million are tied to how much business Google sends Marvell, with roughly 240,000 shares vesting for every $500 million in qualifying revenue through early 2033. If every tranche were earned, Marvell would have generated about $120 billion in qualifying revenue from Google-related purchases. The $120 billion is a vesting threshold, not a spending commitment. Marvell said it will develop a range of custom silicon attached to Google's TPU ecosystem, including AI inference accelerators, networking chips, storage controllers, memory interface controllers and near-memory computing technology. Prediction Markets See Google Trailing in AI Race Google's push to expand its custom-chip ecosystem comes as it battles Anthropic, OpenAI and xAI for leadership in artificial intelligence. Prediction traders remain skeptical. Polymarket gives Google just a 7% chance of having the world's best AI model at the end of 2026, compared with 66% for Anthropic, 14.5% for xAI and 8% for OpenAI. The Marvell agreement highlights another front in that contest: the race to secure cheaper, faster and more specialized computing infrastructure for increasingly demanding AI models. Why Broadcom Is Falling Broadcom Inc. (NASDAQ:AVGO) fell more than 5% on the news as investors weighed the threat from a second major supplier inside Google's custom-AI-chip ecosystem. Broadcom remains deeply entrenched at Google, having signed a long-term agreement in April to develop future TPU generations and supply components for next-generation AI racks through 2031. The concern is not that Marvell is replacing Broadcom, but that it could capture a growing share of Google's future AI silicon spending. Marvell reports fiscal second-quarter earnings on Aug. 27, giving investors their first opportunity to press management for more detail on the scale and timing of the Google business. Image: Shutterstock Markets NVDA Rival Cerebras Unveils New AI System It Says Is Up to 30X Faster Than Nvidia GPUs Cerebras unveiled its new CS-4 AI system, claiming up to 30X faster inference than Nvidia GPUs as it targets the AI inference market. 2 min read Read this article Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Marvell gives Google option to buy $12.2 billion stake in custom chip deal

Marvell said it would develop AI inference accelerators, storage, networking and memory interface controllers and near-memory computing technologies for Google. Demand for custom chips such as Google's tensor processing units (TPUs), ⁠used for AI workloads, has surged in recent years as businesses seek alternatives to Nvidia's pricey graphics processors. Marvell Technology said on Wednesday it has issued Alphabet's Google a warrant to buy a stake worth about $12.18 billion as part of a deal ⁠to ⁠help develop custom chips for the search giant. Shares of the custom chipmaker jumped more than 11% in premarket trading, while larger rival Broadcom was down over ⁠3%. Demand for custom chips such as Google's tensor processing units (TPUs), ⁠used for AI workloads, has surged in recent years as businesses seek alternatives to Nvidia's pricey graphics processors. Marvell said it would develop AI inference accelerators, storage, networking and memory interface controllers and near-memory computing technologies for Google. In April, Broadcom signed ⁠a long-term agreement with Google to develop and supply future generations of custom AI chips and other components for the company's next-generation AI racks through 2031.

Why Marvell Technology Stock Is Surging Wednesday Morning - Marvell Technology (NASDAQ:MRVL)

Marvell Technology Inc. (NASDAQ:MRVL) shares are surging Wednesday morning following an SEC Form 8-K filing disclosing a major commercial agreement and warrant deal with Google. Here's what investors need to know. * Marvell Technology shares are powering higher. Why is MRVL stock up today? MRVL Stock Surges Following Landmark Google TPU Partnership Disclosure Under the expanded partnership, Marvell will develop a comprehensive range of custom semiconductor products designed to attach directly to Google's TPU ecosystem. The deal encompasses AI inference accelerators, storage controllers, network interface controllers, memory interface controllers and near-memory compute solutions. To lock in long-term alignment, Marvell issued Google a warrant to purchase up to 58,970,907 shares of MRVL common stock at an exercise price of $206.58 per share. The multi-year structure tightly couples equity vesting to commercial adoption, with 1,360,867 shares vesting over the first year and the remaining 57.6 million shares vesting in 240 tranches for every $500 million in custom products revenue generated through fiscal 2033. Latest Private Market Opportunities Join 400,000+ Investors Investors are reacting positively to the strategic validation of Marvell's custom ASIC and data center platform. While the warrant introduces long-term potential share dilution, retail and institutional investors are prioritizing the revenue visibility created by deep integration into Google's hyperscale AI infrastructure. Key Takeaways: Why the Google Deal Powers MRVL The agreement cements Marvell as a key custom silicon partner for hyper-scalers building out next-generation AI infrastructure. Tying Google's equity vesting directly to incremental $500 million revenue milestones aligns both companies toward massive long-term commercial scale. Furthermore, the deal provides strong multi-year revenue visibility through fiscal 2033, offsetting near-term dilution concerns with guaranteed ecosystem demand. MRVL Shares Surge Wednesday Morning MRVL Price Action: Marvell Technology shares were up 12.92% at $243.90 during premarket trading on Wednesday, according to Benzinga Pro data. Tech Analog Devices Sees Momentum Stretching Into 2027 After 40% Revenue Surge Analog Devices (NASDAQ: ADI) beats Q3 estimates with $4.02B revenue and issues strong Q4 guidance. Shares rise in premarket trading. 2 min read Read this article Image: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Marvell gives Google option to buy US$12.2 billion stake in custom AI chip deal

Marvell Technology will help develop Google's in-demand custom chips and has offered the search giant the right to buy a potential US$12.2 billion stake, the latest deal in which Big Tech is investing in the suppliers powering its AI build-out. Shares of the chipmaker jumped nearly 8 per cent as the deal marked a major vote of confidence from a top cloud-computing provider and could bring roughly $120 billion in revenue through fiscal 2033, if Google hits the targets its stake option depends on. Larger rival Broadcom, which had been Google's main custom chip partner so far, fell more than 5 per cent, while shares in Google-parent Alphabet GOOGL.O were little changed. * Latest technology news on BNNBloomberg.ca Demand for in-house chips such as Google's tensor processing units (TPUs) has surged as companies seek cheaper alternatives to Nvidia's pricey graphics processors and technologies better suited for inference, the process of running trained AI models. A recent overhaul of Google's AI division that shifted power toward executives with closer ties to Google Cloud has also put the spotlight on the custom chips and AI infrastructure, which analysts say are increasingly central to powering that business. Still, Wednesday's deal could add to growing concerns around the increasingly intertwined relationships in the AI industry, days after Nvidia agreed to provide a backstop of up to $105 billion for a data-center project OpenAI is leasing in Ohio. In October, AMD struck a similar deal, agreeing to supply OpenAI with AI chips worth tens of billions of dollars in annual revenue while giving the ChatGPT maker the option to buy a stake of up to roughly 10 per cent in the chipmaker. The Marvell-Google deal covers a broad range of technologies used with TPUs, including processors that run AI models, manage data storage and move information across networks. It gives Google a warrant to buy up to 58.97 million Marvell shares at $206.58 apiece. That is worth $12.18 billion if fully exercised and will make Google the fifth-largest investor of Marvell. "This is a big win for Marvell," said Morningstar analyst William Kerwin, but added that he saw "this news as a growing pie at Google for new sources, rather than a competitive displacement of Broadcom."

Marvell gives Google option to buy US$12.2 billion stake in custom chip deal

Marvell Technology said on Wednesday it has issued Alphabet's Google a warrant to buy a stake worth about US$12.18 billion as part of a deal to help develop custom chips for the search giant. Shares of the custom chipmaker jumped more than 11 per cent in premarket trading, while larger rival Broadcom was down over 3 per cent. Demand for custom chips such as Google's tensor processing units (TPUs), used for AI workloads, has surged in recent years as businesses seek alternatives to Nvidia's pricey graphics processors. Marvell said it would develop AI inference accelerators, storage, networking and memory interface controllers and near-memory computing technologies for Google. In April, Broadcom signed a long-term agreement with Google to develop and supply future generations of custom AI chips and other components for the company's next-generation AI racks through 2031. (Reporting by Anhata Rooprai in Bengaluru; Editing by Shilpi Majumdar)