Marvell Technology said this week it has granted Google a warrant to purchase up to 58.97 million of its shares at $206.58 apiece — an option worth roughly $12.2 billion if fully exercised — as the two companies deepen a partnership to design custom chips for Google's artificial-intelligence data centers. News of the deal, first reported by Reuters, sent Marvell shares up nearly 8% on Wednesday, while Broadcom — which has been Google's dominant custom-chip partner — fell more than 5%.
If Google exercises the warrant in full, it would become Marvell's fifth-largest shareholder, tying the search giant's financial interests directly to the chipmaker it depends on for parts of its AI infrastructure. The arrangement is structured less like a traditional supply contract and more like a hybrid of customer and investor, a pattern that has become increasingly common as hyperscalers race to lock down chip capacity.
How the warrant vests
The stake option does not hand Google a windfall automatically. Only about 1.4 million shares vest in the deal's first year regardless of what Google buys. The remaining 57.6 million shares are tied to purchasing milestones: Google earns vesting rights on roughly 240,000 shares for every $500 million in qualifying chip orders it places with Marvell, according to terms of the agreement described in reporting on the filing. In effect, Marvell is paying Google in equity for guaranteed, escalating chip purchases rather than offering a flat discount.
The scope of the partnership covers a broad range of silicon that works alongside Google's own Tensor Processing Units, or TPUs — the custom chips Google designs in-house to train and run its AI models. Marvell's contribution includes processors that support those TPU clusters, chips that manage high-speed data storage, and components that move information between servers inside a data center. None of it replaces the TPU itself; instead, it fills out the surrounding infrastructure that determines how efficiently a chip cluster actually runs.
Marvell disclosed that the relationship could generate roughly $120 billion in revenue through fiscal 2033 if Google hits the purchasing targets the warrant is pegged to. That figure is a ceiling tied to execution over seven years, not a guaranteed sum, and it depends on Google's AI infrastructure spending continuing to climb at its current pace.
Broadcom's shrinking exclusivity
The deal is notable in part for what it signals about Broadcom, which has for years been Google's primary partner on custom AI silicon design. Morningstar analyst William Kerwin, commenting on the announcement, said the Marvell deal should be read as additive rather than a takeover of Broadcom's existing business.
This is a big win for Marvell.
William Kerwin, Morningstar analyst
Kerwin characterized the move as "a growing pie at Google for new sources, rather than a competitive displacement of Broadcom" — meaning Google appears to be diversifying its supplier base as its chip needs expand, rather than swapping one vendor for another. Even so, the market reaction suggests investors read it as a meaningful erosion of Broadcom's leverage as Google's near-exclusive custom-silicon partner.
The arrangement fits a broader pattern reshaping the AI supply chain, in which chipmakers and their largest customers are increasingly binding themselves together through equity rather than standard purchase orders. AMD struck a comparable structure with OpenAI earlier this year, tying tens of billions of dollars in annual chip revenue to an option for OpenAI to take roughly a 10% stake in AMD. Nvidia has taken the opposite role as financier, providing up to $105 billion in backstop financing for OpenAI's data-center buildout in Ohio.
For Google, the deal underscores how central custom silicon has become to its AI strategy as it competes with Nvidia's general-purpose GPUs on both cost and performance. For Marvell, it locks in a customer whose AI infrastructure spending shows no sign of slowing — with the chipmaker's upside now explicitly tied to how aggressively Google keeps building.
