Google is teaming up with U.S. chip design company Marvell Technology to develop custom artificial intelligence (AI) chips. It also obtained options to acquire Marvell equity worth up to $12.2 billion (about 17 trillion won).
Marvell said on the 19th (local time) that it signed a contract with Google to develop and supply custom chips, including tensor processing units (TPUs). A TPU is an AI Semiconductor that Google designed in-house for AI training and inference.
That day, Marvell also granted Google warrants to purchase about 59 million shares of its common stock at $206.58 per share. If Google fully exercises the options, the total would reach up to $12.18 billion (about 16.9 trillion won). Once the transaction is completed, Google will become Marvell's fifth-largest shareholder.
This does not mean Google is immediately investing $12.2 billion in Marvell. Of the target shares, 1,368,670 shares will vest quarterly over the next year. The remainder will vest in stages, with a certain amount granted each time Google purchases $500 million worth of Marvell products, from the third quarter of 2027 through the end of 2033. In other words, Google must purchase that much of Marvell's products.
If Google meets all its purchase targets, Marvell is expected to post cumulative revenue of up to $120 billion (about 167 trillion won) from Google.
Marvell is expected to support detailed chip design and production management for Google's TPUs and supply product lines related to custom chips that will connect to the TPU ecosystem. Specifically, it plans to develop a range of custom chips with Google, including AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory computing.
With Google adding Marvell after Broadcom, its existing key partner, some say it is moving to diversify its AI Semiconductor supply chain.
On the news of the Google-Marvell partnership, Marvell's share price at one point surged as much as 14% intraday.