Google is giving Marvell Technology an option to sell it up to $12.2 billion worth of shares as part of a deal to develop custom artificial intelligence chips, deepening the technology giant’s ties with a semiconductor supplier at the heart of its expanding AI infrastructure.
The agreement could generate as much as $120 billion in revenue for Marvell through fiscal 2033 if Google meets the targets tied to its investment option, according to the companies. Marvell shares jumped nearly 8% on Wednesday after the deal was announced.
The agreement is the latest example of Big Tech putting money directly into the companies supplying the chips, data centers and other infrastructure needed to build AI systems at scale.
Marvell will help Google develop a range of technologies used with its Tensor Processing Units, or TPUs, the custom chips Google designs to train and run AI models. The technology covered by the agreement includes processors for running AI models, managing data storage and moving information across networks.
The deal gives Google a warrant to purchase up to 58.97 million Marvell shares at $206.58 each. If fully exercised, the stake would be worth about $12.18 billion and make Google Marvell’s fifth-largest investor.
“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.”
The deal could nevertheless reshape the competitive landscape for Google’s custom chips. Broadcom has been Google’s main custom-chip partner and its shares fell more than 5% following the announcement. Alphabet shares were little changed.
Google’s push into custom silicon reflects a broader shift across the AI industry. Companies are increasingly developing or commissioning their own chips as they seek alternatives to Nvidia’s expensive graphics processors and hardware optimized for specific workloads, including inference, the process of running trained AI models.
Google’s AI chip strategy has also gained importance following a recent restructuring of its AI division that gave greater influence to executives with closer ties to Google Cloud. Analysts say custom chips and AI infrastructure are becoming increasingly important to the cloud business.
The Marvell deal also underscores how tightly connected the AI industry has become, with major technology companies simultaneously acting as customers, investors and strategic partners of the suppliers building the infrastructure behind the boom.
Nvidia recently agreed to provide a backstop of up to $105 billion for a data-center project that OpenAI is leasing in Ohio. In October, AMD struck a similar agreement with OpenAI to supply the company with AI chips capable of generating tens of billions of dollars in annual revenue while giving OpenAI an option to acquire a stake of up to roughly 10% in AMD.
For Marvell, the Google agreement provides both a major customer opportunity and a potential source of capital as it seeks to challenge larger rival Broadcom in the increasingly lucrative market for custom AI silicon.
Stay ahead of the Stories shaping our world. Subscribe to Impact Newswire and join our
WhatsApp Channel for updates on global tech, business, and innovation—all in one place.
Dive deeper into the future with the Cause Effect 4.0 Podcast, where we explore the ideas, trends, and technologies driving the global AI conversation.
Got a story to share? Contact Us to reach a global audience with Impact Newswire.
Mohd Hassan has extensive experience in news gathering, editing, and writing for the newswire industry, Contact – Info@impactnews-wire.com
Discover more from Impact Newswire
Subscribe to get the latest posts sent to your email.
