Marvell Grants Google Up to $12.2 Billion Share Option as Custom AI Chip Partnership Expands

Marvell Technology granted Google a warrant to purchase up to 58,970,907 Marvell shares at an exercise price of $206.58 per share, creating a maximum transaction value of roughly $12.2 billion. The warrant is tied to an expanded partnership in which Marvell will help Google develop custom artificial-intelligence chips.

Google receives the right to buy the shares rather than an immediate equity stake. Most of the warrant is scheduled to vest as Google’s purchases of custom Marvell chips reach specified revenue thresholds through fiscal 2033, linking the size of the possible investment to future business between the companies. Marvell shares rose between 8% and 14% during trading after the announcement.

Google is using the agreement to deepen access to custom silicon for data centers, where specialized processors support artificial intelligence workloads. The arrangement broadens Marvell’s role in Google’s Tensor Processing Unit program, according to MLQ, while reinforcing Google’s effort to develop infrastructure tailored to its own services.

Custom chips give large cloud operators greater control over performance, supply planning and computing costs. Google already designs TPUs, and Marvell brings expertise in chip design and manufacturing support. CNBC has framed the broader push as part of an industry effort by Google and its rivals to improve efficiency and reduce reliance on Nvidia’s dominant accelerator platform.

The warrant gives Marvell a major commercial incentive while attaching the value of the equity option to Google’s future chip demand. Investors treated the structure as a strong endorsement of Marvell’s custom-silicon business, sending the stock sharply higher after the filing.

The announcement also places Marvell within a wider group of suppliers receiving strategic backing from technology companies building AI capacity. Marvell has drawn attention for custom-chip work involving Google and Amazon, while separate reporting has highlighted relationships and investments involving AMD and Nvidia. That mix makes Marvell’s growth story depend on execution across several large customers, rather than on a single chip product.

The agreement adds to competitive pressure around the supply of AI accelerators and the design of application-specific chips. Google’s internal silicon effort reduces the company’s dependence on off-the-shelf processors, while Marvell gains a larger role in supplying the infrastructure behind one of the world’s largest cloud platforms.

Broadcom remains a major participant in custom AI silicon, and market reactions have reflected the rivalry. CNBC reported that Broadcom shares fell as Marvell shares climbed after earlier news of Marvell’s work with Google. The competitive picture includes Nvidia’s accelerator business, Broadcom’s custom-chip operations and suppliers such as Marvell, with hyperscalers increasingly shaping their own hardware road maps.

The warrant’s exercise price and vesting conditions make the arrangement a long-term commercial instrument rather than a simple cash investment. Google can buy the shares at the set price if the contractual milestones are met, while Marvell receives a customer commitment connected to the chip program.

For Google, the structure can align a supplier’s incentives with delivery and demand over several years. For Marvell, it creates the possibility of substantial future capital for the company while tying that upside to successful chip development and sales. The arrangement also introduces dilution for existing shareholders if Google exercises the full warrant, although the market response showed investors focused on the expected expansion of Marvell’s AI business.

The next test is whether Marvell and Google convert the expanded partnership into sustained production and revenue milestones. The warrant’s vesting schedule through fiscal 2033 gives the companies a long runway, but it also puts execution, chip performance and delivery capacity at the center of the deal.

Google’s move fits a broader shift among cloud providers toward internally specified silicon and diversified AI hardware supply. Marvell’s ability to serve Google alongside other large customers will determine whether the agreement becomes a foundation for durable growth or a high-profile commitment with demanding targets. Investors will watch future filings for vesting progress, chip revenue and evidence that custom processors are gaining share of data-center spending.