Google Took A 12.2 Billion Dollar Option On Marvell, And Broadcom Lost Its Seat

Google now has the right to buy 58.97 million Marvell shares at 206.58 dollars each. Exercised in full that is 12.18 billion dollars, and it would make Google the fifth largest investor in a company it previously just bought parts from.

The warrant was disclosed on 19 August, and it is payment of a sort. In exchange, Marvell helps build Google's custom silicon.

What the Google Marvell custom AI chip deal actually covers

The scope is wider than the TPU everyone associates with Google. It reaches the processors that run models in production, the parts that handle storage, and the networking silicon that shifts data between them. Accelerators get the headlines, but the things that feed them are where large deployments actually fall over.

If Google hits the targets the warrant depends on, the arrangement is reported to be worth roughly 120 billion dollars in revenue to Marvell through fiscal 2033. That is a number attached to milestones rather than a signed order, so treat it as a ceiling.

Broadcom lost the seat

Marvell stock jumped somewhere between 8 and 10 percent. Broadcom, which had been Google's main custom chip partner, fell more than 5 percent on the same day. Markets read this as a swap rather than an addition.

Why equity instead of a contract

A supply contract gets you priority and a price. A warrant gets you a claim on the value your own volume creates. Every large AI buyer is now trying to shrink the share of its compute budget that flows to a single vendor, and the mechanism they are reaching for is ownership rather than procurement.

That pattern is showing up everywhere. OpenAI has been building toward its own accelerator rather than buying Nvidia forever, and the roadmap churn at the top of the market, including the cancelled Rubin CPX, keeps proving that no single vendor's plan survives contact with demand.

What to watch next

Two things. Whether Microsoft or Amazon copy the warrant structure rather than signing another multi-year supply agreement, and whether Broadcom lands a comparable seat elsewhere before the market decides the loss is permanent. If you want the plain version of what all this silicon does differently, our NPU vs GPU vs CPU explainer covers the ground.