Marvell Grants Google $12.2B Warrant for Custom Chips

Google and Marvell Technology have strengthened their partnership on custom chips for Google's AI infrastructure. As part of this expanded agreement, Marvell has granted Google a warrant to buy up to 58,970,907 shares of its common stock at $206.58 apiece, worth as much as $12.2 billion if fully exercised.

The arrangement includes a vesting structure tied to chip purchases through fiscal year 2033. This means that Google's ownership stake will grow only as fast as it actually buys chips from Marvell. For each $500 million in custom product revenue that Marvell recognizes, additional shares will vest, with the full $12.2 billion potential only materializing if Google meets this target.

The deal is a significant boost for Marvell, which rose about 8 percent after climbing as much as 14 percent earlier in the day. While Broadcom, its rival and existing partner of Google, fell around 5 percent, analysts view the agreement as a positive development for Marvell without necessarily displacing Broadcom.