Alphabet Gets Option to Buy Up to $12.2 Billion of Marvell Shares in AI Chip Deal

Alphabet, Google's parent company, has entered into an agreement with Marvell Technology that gives Alphabet the right to purchase up to 58.97 million Marvell shares at $206.58 each, representing more than $12 billion in potential value, Alexei Oreskovic reported for Fortune Tech.

Alphabet has secured an option to buy up to $12.2 billion of Marvell shares as the companies expand their partnership on custom AI chips. [Photo: Marvell Technology X]

Under the agreement, Marvell will work with Google on custom silicon programs supporting Google's artificial-intelligence infrastructure, including its Tensor Processing Unit (TPU) ecosystem.

TPUs are Google's custom-designed AI accelerators, which are used in the company's data centers to train and run AI models.

The agreement represents a significant expansion of Marvell's relationship with Google. Marvell is expected to develop and supply custom chips and related technologies for Google's AI infrastructure. 

Broadcom could be among the companies affected by the expanded relationship. Broadcom has been a major partner in developing Google's TPU technology, and its shares fell 4.6% following news of the Marvell agreement. 

The deal highlights Google's efforts to diversify its AI-chip supply chain as demand for computing power continues to surge.

For Marvell, the agreement strengthens its position in the rapidly growing custom-silicon market. For Google, working with multiple chip partners could give the company greater flexibility as it expands its AI infrastructure.