Marvell Hands Google a $12.2B Stake Option in a Custom AI Chip Deal That Could Be Worth $120B

Marvell Technology has granted Google a warrant to buy up to 58.97 million of its shares at $206.58 apiece — a stake worth $12.18 billion if fully exercised — as part of a custom AI chip deal that could generate roughly $120 billion in revenue for Marvell through fiscal 2033. Marvell stock jumped nearly 8% on the news. Broadcom, Google’s main custom-silicon partner until now, fell more than 5%.

The structure is the interesting part. The warrant shares don’t vest up front — the bulk unlock only as Google hits cumulative spending thresholds on Marvell silicon. Google’s equity position scales in direct proportion to how much it actually buys. If Google spends nothing, it owns nothing. If it spends its way to the full $120 billion, it becomes Marvell’s fifth-largest shareholder. It’s a loyalty program denominated in billions.

The deal covers a broad range of technologies around Google’s tensor processing units: the processors that run AI models, the chips that manage data storage, and the networking silicon that moves information between them. That last category matters more than it sounds — at datacenter scale, interconnect is often the bottleneck, not compute.

The strategic logic is straightforward. Google wants alternatives to expensive Nvidia processors, particularly for inference, where custom silicon’s economics shine. TPUs are Google Cloud’s clearest differentiator against AWS and Azure, and after its recent AI division restructuring, Google is doubling down on owning that stack. Splitting the work between Broadcom and Marvell also gives Google pricing leverage over both — which explains Broadcom’s 5% haircut better than any lost revenue does. The market isn’t repricing Broadcom’s current contracts; it’s repricing its negotiating position.

This is also the third mega-deal in a growing pattern of equity-entangled AI supply chains: AMD granted OpenAI warrants tied to chip purchases, Nvidia committed $105 billion in financing to OpenAI’s Ohio datacenter, and now Google-Marvell. Suppliers are handing equity to their biggest customers, customers are financing their suppliers, and everyone’s balance sheet is increasingly a bet on everyone else’s. That works beautifully while AI capex climbs. If demand ever flattens, these interlocking positions will unwind in the same direction at the same time.

For now, the takeaway is simpler: the custom AI silicon market just became a two-vendor race for Google’s business, and Google structured the deal so it wins either way.

Sources

• Yahoo Finance