Google Gets Paid in Marvell Stock Warrants for Buying Custom Chips

Google has negotiated a unique agreement with Marvell Technology to purchase custom chips. In exchange for buying these chips, Google received a warrant covering 58,970,907 of Marvell's shares (about 7% of the company) at an exercise price of $206.58.

The unusual part is that most of the shares vest in stages as Google makes discretionary purchases on covered products. For every $500 million spent, Google receives another block of stock at a fixed price of $206.58 per share.

This agreement shows where the leverage sits in the AI build-out. Alphabet's chip budget has become valuable enough that suppliers will hand over ownership stakes to win it. For Alphabet shareholders, this is a small sweetener on chip spending that was likely coming anyway.