Marvell hands Google $12.2B warrant in custom-chip deal

Marvell Technology gave Google warrants to buy as many as 58.97 million shares at $206.58 apiece, worth about $12.2 billion at full exercise, in exchange for a multi-year custom-chip supply arrangement whose commercial terms were signed on July 29. Google would take roughly 7% of the company and land as Marvell's fifth-largest investor, Bloomberg reported.

The vesting structure is what makes the deal unusual. Nearly 1.4 million shares unlock in year one. The remaining shares release in 240 equal tranches, one for every $500 million in custom-chip revenue Marvell records from Google, running through fiscal 2033. Fully worked, that mechanism corresponds to roughly $120 billion in cumulative purchases. The equity price of the option, in other words, is Google actually spending the money.

The products slot into Google's tensor processing unit ecosystem: AI inference accelerators, storage and network interface controllers, memory interface controllers, and near-memory compute. Morningstar's William Kerwin called it "a big win for Marvell," but characterized the setup as "a growing pie at Google for new sources, rather than a competitive displacement of Broadcom."

Investors read it both ways. Marvell shares rose as much as 14% intraday. Broadcom's fell about 5%. Alphabet closed roughly flat.

This is the third Google story on our tracker this week and one more entry on a chips beat where chip vendors have already backed $250B of AI rounds this year, with the equity flowing in the opposite direction from this deal. The filing doesn't name which TPU generations the new Marvell parts attach to, or what happens to Broadcom's existing socket if Google's spending shifts.