Google partners with Marvell to co-develop AI chips, gains warrants for $17 billion stake

Google is partnering with U.S. semiconductor firm Marvell Technology to jointly develop custom artificial intelligence (AI) chips. This strategic move is seen as an effort to broaden the production base for Google's proprietary AI chips, including its Tensor Processing Units (TPUs), and lessen its dependence on high-priced graphics processing units (GPUs) from market leader Nvidia and chips from Broadcom. According to a filing by Marvell with the U.S. Securities and Exchange Commission (SEC), the companies will co-develop custom semiconductors, including Google's TPUs. Marvell will also issue warrants to Google, granting it the right to purchase approximately 59 million shares of Marvell stock at $206.58 per share. If fully exercised, this would represent a stake of about $12.18 billion, making Google one of Marvell's top five shareholders. While Google has been developing its own AI chips like the TPU, it has previously relied on partners such as Broadcom for manufacturing. This agreement positions Marvell as a key AI chip partner for Google. The collaboration is expected to extend beyond the initial discussions on new TPUs and memory semiconductors to potentially include chips for data storage and networking. The partnership is driven by the rapidly increasing demand for AI computing power. By expanding its in-house AI chip production, Google aims to gain more control over its supply chain and potentially reduce costs associated with relying on external chip providers like Nvidia. Analysts view this as a move to capitalize on Google's growing market share rather than directly displacing Broadcom as a supplier.

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Rather than pushing Broadcom out, Google's market itself is growing, and a new supplier is being added.