Marvell hands Google a $12.2B warrant tied to custom-chip orders
Marvell granted Google a warrant for 59 million shares at $206.58 — $12.2 billion if fully exercised — vesting in tranches unlocked by every $500 million of chips Google buys through fiscal 2033, potentially $120 billion in custom silicon. The parts are inference accelerators plus storage and networking controllers around Google's TPUs, not the TPUs themselves, so Broadcom keeps the core design work while losing its monopoly on Google's custom-chip spend; its shares fell about 5%. Morningstar's William Kerwin read it as a growing pie at Google rather than displacement. The equity-for-orders structure puts it in the same circular-deal category as Nvidia's OpenAI backstop and AMD's stake-for-supply pact, the pattern now feeding AI-bubble arguments.
Source: thenextweb.com ↗
Google does not pay cash for the shares up front. Instead, it earns the right to buy them as it places orders, with each $500 million of chip purchases unlocking a further tranche of the warrant.
Why this matters
- → Google locks in a $120B custom-chip supplier with equity incentives, reducing Nvidia dependence.
- → Pattern of AI-industry "circular deals" (equity-for-orders) intensifies valuation-bubble concerns.
- → Broadcom loses monopoly on Google's custom silicon; Marvell becomes viable second source.