Marvell gives Google option to buy $12.2 billion stake in custom chip deal
This digest was compiled by AI from multiple sources — links to the originals are below.
Marvell Technology will help develop Google's custom chips and has granted the tech giant the option to buy as much as $12.2 billion in Marvell shares. Shares of Marvell jumped more than 11% in premarket trading, while Broadcom fell over 2%.
Key Facts
- Google received a warrant to buy up to 58.97 million Marvell shares at $206.58 apiece; if fully exercised, the warrant would be worth about $12.18 billion.
- A fully exercised warrant would make Google Marvell's fifth-largest investor, according to LSEG data.
- Most of the warrant becomes available only if Google meets agreed purchasing targets through fiscal 2033.
- Big Tech companies reinforced expectations to spend more than $700 billion on AI infrastructure this year, up from $400 billion last year.
Deal Structure
Marvell Technology will help develop Google's tensor processing units and a broad range of chips designed to work with the TPU ecosystem. Google received a warrant to buy up to 58.97 million Marvell shares at $206.58 apiece. Fully exercised, the warrant would be worth about $12.18 billion, making Google Marvell's fifth-largest investor. Most of the warrant becomes available only if Google meets agreed purchasing targets through fiscal 2033.
Market Reaction
Shares of Marvell jumped more than 11% in premarket trading. Larger rival Broadcom, Google's main custom chip partner, fell over 2%. The agreement comes weeks after Big Tech companies reinforced expectations of spending more than $700 billion on AI infrastructure this year. That figure marks a step up from last year's $400 billion outlay.
Competitive Landscape
Demand for in-house chips such as Google's TPUs has surged as companies seek cheaper alternatives to Nvidia's graphics processors. Marvell faces stiff competition from Broadcom, which signed a long-term agreement with Google through 2031. Google's TPU ecosystem underpins much of the company's AI infrastructure.
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Marvell gives Google option to buy $12.2 billion stake in custom chip deal
