Marvell Partners with Google on Custom AI Chip, Issues $12.2 Billion Warrants to Google

BlockBeats News, August 20th. On August 19th, Marvell Technology filed a document with the U.S. SEC disclosing that the company has expanded its custom semiconductor collaboration with Google. The two parties signed a commercial agreement on July 29th, covering products related to the Google TPU ecosystem, including AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and in-memory computing.

As part of the collaboration, Marvell issued stock warrants to Google on August 18th, allowing it to purchase up to approximately 58.97 million shares of the company's common stock at a price of $206.58 per share, with a total exercise value of about $12.2 billion. Around 1.36 million shares vest in the first year on a time-based schedule, while the rest vest in tranches based on Google's future purchase of custom products (with each $500 million in revenue triggering a vesting tranche), extending to the fiscal year 2033, corresponding to a potential cumulative revenue cap of around $120 billion.

Following the announcement, Marvell's stock price surged over 11%, while competitor Broadcom's stock price fell. Analysts believe that this move strengthens Marvell's position in the custom chip sector for hyperscale cloud providers.