Google Teams Up With Marvell to Develop Custom Chips

Marvell Technology (MRVL), a custom chipmaker, has partnered with Alphabet's Google to develop custom chips. This partnership is seen as advantageous for companies that have custom chip design capabilities and intellectual property blocks.

Matt Bryson of Wedbush Securities notes that this outcome isn't necessarily unexpected. He believes that it reiterates the current environment where companies with custom silicon design capabilities, like Marvell and Broadcom (AVGO), are in an advantageous position.

Google has diversified its partner base for tensor processing units (TPUs) by partnering with AMD (AMD). The partnership between Google and Marvell includes a comprehensive range of custom silicon programs that attach to the TPU ecosystem. This includes AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory compute.

As part of the deal, Marvell issued Google a warrant to purchase up to 58.97 million shares at an exercise price of $206.58 per share. The market cap of MRVL stock has rallied by 183% so far this year, with a current valuation of $207.4 billion.