Google Wins Right to Buy Up to $12.2 Billion in Marvell Shares

Marvell Technology and Alphabet's Google have announced an expanded partnership in chip development. As part of this deal, Marvell has granted Google a warrant to purchase up to nearly 59 million shares at $206.58 each. This could amount to as much as $12.2 billion.

The custom chips, which include artificial intelligence inference accelerators and storage controllers, will contribute to Google's tensor processing unit (TPU) ecosystem. TPU is a specialized chip designed to efficiently perform AI calculations. The deal also includes a revenue-based vesting schedule for nearly 1.4 million shares, with each tranche representing $500 million in revenue from custom chips sold to Google.

The partnership marks Google's continued effort to develop and supply custom TPUs. As the business grows, Alphabet is expected to generate about $3 billion of revenue from TPU-related infrastructure this year and $25 billion in 2027, according to Citizens analyst Andrew Boone.