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

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.

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.