Marvell Shares Jump 6% as Google Deal Opens Door to $12.2 Billion Stake
Marvell rose 6% as a filing showed Google could buy up to $12.2B in shares under their custom AI chip deal.
According to the filing, the deal allows Google to purchase up to 58,970,907 Marvell shares at $206.58 apiece. The stake is tied to purchasing targets through the 2033 fiscal year. Marvell said the expanded agreement will include products that "attach to the [tensor processing unit] ecosystem," such as artificial intelligence inference accelerators, storage controllers and network interface controllers.
The announcement follows an April report by The Information that Marvell and Google were working on a chip deal for AI workloads, including a tensor processing unit and a memory processing unit. That news had also sent Marvell shares higher. Google, along with Amazon, Meta and Microsoft, has been developing custom silicon for AI in an effort to find cheaper alternatives to Nvidia chips.
Google has largely relied on Broadcom for custom chip development over the past decade, and the two companies expanded their deal in April. Broadcom's stock fell about 5% on Wednesday after the Marvell-Google agreement was disclosed.