Marvell Technology shares jumped 6% following the announcement of a deal that allows Google, through its parent company Alphabet, to purchase up to $12.2 billion in Marvell shares, as disclosed in a securities filing [1]. The agreement enables Google to buy up to 58,970,907 shares at a price of $206.58 each, with the stake tied to purchasing targets through the 2033 fiscal year [1].
This expanded partnership between Marvell and Google centers on custom chips, specifically products that integrate with the tensor processing unit (TPU) ecosystem. These include artificial intelligence inference accelerators, as well as storage and network interface controllers [1]. The deal builds on an earlier report from April, which indicated a chip agreement between Marvell and Google for AI workloads, including TPUs and memory processing units [1].
The announcement comes amid a broader industry trend, with Google and other major technology companies such as Amazon, Meta, and Microsoft developing custom silicon chips for AI workloads to reduce reliance on Nvidia chips [1]. Historically, Google has collaborated with Broadcom on custom chips, and that partnership was also expanded in April [1]. However, following the news of the Marvell-Google deal, Broadcom's stock declined about 5% on Wednesday [1].
CONCLUSION
Marvell's stock experienced a significant boost after securing a deal with Google that could see up to $12.2 billion invested in its shares, highlighting the growing importance of custom AI chips. The agreement not only strengthens Marvell's position in the AI hardware market but also triggered a negative reaction in Broadcom's stock, reflecting shifting dynamics in the sector.