Marvell pops 6% on AI chip deal that lets Google buy up to $12.2 billion in shares

Marvell Technology shares rallied 6% on a deal that would allow Google to buy up to $12.2 billion in shares of the chipmaking company, according to a securities filing.

The deal, part of Google and Marvell's partnership on custom chips, would allow the tech giant to purchase up to 58,970,907 shares at $206.58 apiece. The stake is tied to purchasing targets through the 2033 fiscal year.

Marvell said in a filing that the expanded agreement will include products that "attach to the [tensor processing unit] ecosystem," such as artificial intelligence inference accelerators, and storage and network interface controllers.

In April, Marvell shares popped on a report of a chip deal with Google for artificial intelligence workloads. At the time, The Information reported that the deal would include a TPU and memory processing unit.

Google and its megacap competitors, including Amazon, Meta and Microsoft have been working on custom silicon chips for AI workloads in a bid to find cheaper substitutes to Nvidia chips.

Over the last decade, Google has largely collaborated with Broadcom on custom chips. The companies expanded that deal in April.

Broadcom's stock fell about 5% on Wednesday.

Marvell and Broadcom stock chart.