Marvell Technology announced the expansion of its partnership with Google and granted Google a warrant, allowing the latter to purchase up to $12.2 billion worth of Marvell stock.
Marvell Technology disclosed the company's 8-K form filed with the U.S. Securities and Exchange Commission (SEC) on its official website on Wednesday (August 19). The document shows that Google can purchase up to approximately 59 million shares of Marvell stock at a price of $206.58 per share.
Among them, nearly 1.4 million shares will vest in the first year after the cooperation agreement is signed, and thereafter, they will vest in 240 tranches until the end of Marvell's fiscal year 2033. Each batch of stock vests corresponding to every $500 million in revenue generated from Marvell's sales of custom chips to Google.
According to the statement, these custom chips will be used in Google's Tensor Processing Unit (TPU) ecosystem, including artificial intelligence inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory computing chips.
After the news was announced, Marvell Technology (MRVL) stock price surged up to 14% in early trading; Google's stock price remained largely flat.
Companies like Google, which are heavily investing in AI infrastructure, are looking for ways to reduce chip costs. Currently, NVIDIA's GPUs are still considered the industry's most advanced products, but their pricing is also quite expensive.
As Google makes TPUs available to Google Cloud customers and allows clients to deploy these chips in their own data centers, TPUs have become a major selling point for Google to attract cloud customers. As this business continues to expand, Google has been seeking more custom chips.
Earlier this year, Citizens analyst Andrew Boone stated that Google is expected to generate approximately $3 billion in revenue from TPU-related infrastructure business this year, with this figure projected to reach $25 billion by 2027.
In April this year, Google signed a similar agreement with Broadcom, involving the latter in the development and supply of custom TPUs. Other large cloud service providers, including Amazon, are also developing self-developed semiconductors for inference computing.
