Marvell Surges After Google AI Chip Deal, Grants $12.2B Stake Option
Marvell Technology (NASDAQ:MRVL) rose more than 5% after announcing a major custom chip agreement with Alphabet Inc. (GOOGL/GOOG), which could significantly expand Marvell's role in Google’s artificial intelligence infrastructure. The deal includes a warrant for Google to purchase nearly 59 million shares at $206.58 each, totaling up to $12.2 billion if fully exercised. The agreement involves developing specialized chips tied to Google’s Tensor Processing Units (TPUs), an alternative to Nvidia GPUs in AI workloads. The vesting of the warrant is performance-based: only 1.4 million shares are immediately vested, with additional shares contingent on Marvell securing $500 million increments in business from Google through early 2033. The deal highlights growing competition among cloud providers to secure advanced and cost-effective AI infrastructure. Meanwhile, Broadcom (NASDAQ:AVGO), another key supplier for Google’s TPU ecosystem, fell over 5% as investors assessed the potential shift of future spending toward Marvell.
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Topics: AI custom chips data centers Google partnership semiconductors