Marvell Technology shares jumped more than 11% in premarket trading on Wednesday after the chipmaker announced a new custom semiconductor agreement with Google that gives the technology giant an option to acquire up to 58.97 million Marvell shares.
The warrant, issued to Google on August 18, 2026, allows the company to purchase 58,970,907 Marvell common shares at an exercise price of $206.58 per share. If all the shares become available and the warrant is fully exercised at that price, the transaction would be worth about $12.18 billion.
A Long-Term Deal Built Around Google’s AI Chips
The commercial agreement between Marvell and Google was signed on July 29 and focuses on the development of custom semiconductor products designed to work with Google’s Tensor Processing Unit, or TPU, ecosystem.
According to Marvell’s regulatory filing, the expanded partnership covers several types of custom silicon programs. These include AI inference accelerators, storage controllers, network interface controllers, memory interface controllers and near-memory compute technologies.
The arrangement gives Google a way to potentially increase its ownership in Marvell as its purchases of the company’s custom products grow over time.
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Most Shares Depend on Google’s Purchases
The warrant is structured so that most of the shares will vest based on Google’s purchasing activity rather than becoming available immediately.
Marvell said 1,360,867 shares will vest in equal quarterly installments during the first year following the execution of the commercial agreement and warrant. The remaining shares will vest in 240 equal tranches beginning in Marvell’s third quarter of fiscal 2027 and continuing through the end of fiscal 2033.
Each tranche will vest when Marvell records $500 million in revenue from custom products purchased by Google and its affiliates.
This structure ties Google’s potential investment directly to its procurement from Marvell. The more custom products Google purchases under the agreement, the greater the number of shares that can become available under the warrant.
Google’s Potential Stake Comes With Restrictions
The warrant can be exercised, subject to its terms and vesting conditions, from the date of issuance until August 18, 2033. The exercise price and number of warrant shares are also subject to customary adjustments.
Google cannot freely transfer the warrant to outside parties. Marvell’s consent is required for transfers other than those involving Google’s controlled affiliates. Any shares issued through the warrant will also remain subject to securities laws and specified trading volume restrictions.
If the entire warrant ultimately becomes exercisable and Google takes all the shares, the resulting stake would make Google one of Marvell’s largest shareholders. Reuters reported that such a holding would make Google Marvell’s fifth-largest investor.
Marvell Expands Its Role in Google’s AI Infrastructure
The deal also places Marvell alongside Broadcom in Google’s expanding custom-chip strategy. Broadcom remains a major custom chip partner for Google under a separate agreement covering future generations of custom AI chips and related components through 2031, according to Reuters.
Broadcom shares fell more than 2% in premarket trading on Wednesday following news of the Marvell agreement.
The development comes as demand grows for custom silicon designed for specific artificial intelligence workloads. Google’s TPU infrastructure is central to its AI systems, while custom chips can be designed for particular applications rather than relying solely on general-purpose graphics processors.
For Marvell, the agreement provides a significant opportunity to deepen its relationship with Google while linking a potential multibillion-dollar equity position to long-term purchases of its custom semiconductor products. The structure also gives Google a direct financial interest in Marvell’s performance as the two companies expand their work across Google’s AI chip ecosystem.
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