Google Options $12.2 Billion Stake in Marvell Custom Chip Deal

Marvell Technology has partnered with Google to develop custom chips for AI applications. The deal gives Google an option to buy up to $12.2 billion worth of Marvell shares, making it one of the chipmaker's biggest investors.

The agreement comes as demand for in-house chips, such as Google's tensor processing units (TPUs), has surged due to their cheaper alternatives and better suited technologies for inference. The new tie-up covers a broad range of chips and related technologies designed to work with Google's TPU ecosystem.

Under the deal, Google received a warrant to buy up to 58.97 million Marvell shares at $206.58 apiece. If fully exercised, this would be worth around $12.18 billion. The size of Google's potential stake is linked to its purchasing targets through fiscal 2033.

The partnership between Marvell and Google comes weeks after Big Tech companies reinforced expectations that they will spend more than $700 billion on AI infrastructure this year. This marks a significant increase from last year's $400 billion outlay.