Google signed a custom-silicon agreement with Marvell on July 29 structured so that Google pays for the chips it buys and earns stock on top of what it spends. Marvell issued Google a warrant covering 58,970,907 shares at a fixed $206.58 strike price, worth about $12.2 billion if fully exercised, running through Marvell’s 2033 fiscal year.
Google does not get the shares up front. Roughly 1.4 million vest in the first year, and the rest unlock in tranches as Google places orders, with every $500 million spent releasing another block of warrants. If Google buys enough to exercise the whole thing, Marvell has said the agreement could be worth about $120 billion in chip sales through 2033, and Google would become the company’s fifth-largest shareholder without having written a check for equity.
The chips cover more than one job. The commercial agreement spans AI inference accelerators, storage controllers, network interface controllers, memory interface controllers and near-memory compute, all built around Google’s Tensor Processing Unit ecosystem rather than sold as standalone parts. Marvell was already supplying pieces of that stack; the new terms lock in years of future volume and give Google a financial reason to keep buying instead of shopping the business elsewhere.
Marvell was not Google’s first custom-chip partner. Broadcom has built Google’s TPUs since the program started and holds an agreement running through 2031. Marvell’s warrant gives Google a second supplier with its own multi-year lock-in, the kind of redundancy hyperscalers have been building since AMD gave OpenAI a warrant for up to roughly 10 percent of its own stock in exchange for chip commitments last year. Google is applying the same tool from the other side of the table, paying a supplier in future ownership instead of asking one for it.
Investors treated it as a reshuffling of the supplier list. Marvell shares rose as much as 14 percent on the news. Broadcom, the more established partner now sharing ground it once held alone, fell about 5 percent. Alphabet’s own stock barely moved.
Google’s Cloud unit backs up the scale of that bet. The division’s revenue rose 82 percent in the second quarter to $24.8 billion, against a backlog of $514 billion in signed but unfulfilled contracts, a number that only grows if Google can secure the chips to fill them. The Marvell warrant is a hedge against exactly that constraint: pay in equity now, in exchange for guaranteed capacity later.
It is one of several unconventional financing structures the industry has adopted this year to keep chips flowing faster than cash alone can buy them, alongside Nvidia’s collateral-backed lending push and Anthropic’s talks with Samsung over a custom accelerator of its own. Google’s version is narrower than either: a single supplier, paid in equity, one purchase order at a time.
Sources: The Next Web, Yahoo Finance
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By the Control Plane Editorial Team