Breaking News | Google Bets $12 Billion on Marvell - and Broadcom Just Felt It

Marvell handed Google a warrant to buy up to 58.97 million shares at $206.58 each - a potential $12.2 billion stake if fully exercised. The warrant is tied to a commercial agreement in which Marvell will develop custom AI chips for Google's tensor processing unit (TPU) ecosystem, including inference accelerators, storage controllers, and memory interface controllers. Nearly 1.4 million of those shares vest quarterly over the first year. The rest unlock based on revenue milestones - one tranche for every $500 million Marvell generates from the Google partnership, starting in fiscal Q3 2027 through fiscal 2033.

Marvell shares surged 12.7% in premarket trading. Broadcom, Google's longtime partner on TPU development, fell 3% on the same headline. The divergence is sharp, and the reason is simple: Broadcom appears to be losing share on a marquee hyperscaler program it has supplied for years.

This is not just a new chip contract. It's a supplier reshuffle at one of the biggest buyers of custom AI silicon on the planet. Google has relied on Broadcom to build multiple generations of TPUs - chips designed to train and run AI models more efficiently than general-purpose GPUs. In April 2025, Broadcom signed a long-term deal to supply Google's next-generation AI racks through 2031. Now Marvell is carving out a chunk of that roadmap, and the market is treating it as a competitive loss for Broadcom, not a shared win.

The warrant structure adds a wrinkle. Google doesn't hold equity in Marvell yet, but the deal incentivizes both sides to make the partnership work. Marvell gets a high-conviction customer and a mechanism to fund R&D. Google gets optionality - and a direct financial stake in Marvell's execution risk. If the chips deliver, Google profits twice: once from the performance gains, and again from the equity upside.

Hyperscalers are diversifying their chip suppliers because reliance on a single vendor creates both cost risk and competitive risk. Google, Amazon, and Microsoft are all building custom silicon to reduce dependence on Nvidia's GPUs, which remain expensive and supply-constrained. The Marvell deal signals that Google is willing to split its custom silicon work across multiple partners rather than hand the entire stack to Broadcom. That's good for Marvell. It's less good for Broadcom, which has built a business model around long-term, high-margin hyperscaler engagements.

The broader implication: custom silicon is no longer a one-vendor game. As hyperscalers build out AI infrastructure, they're treating chip suppliers the way they treat cloud regions - redundant, competitive, and negotiable. That creates opportunity for second and third movers like Marvell, Astera Labs, and Credo Technology, all of which saw gains Wednesday morning. It also means incumbents like Broadcom will need to defend their share, not assume it's locked in.

Marvell reports earnings on August 27. Investors will want to hear whether management quantifies the Google partnership in terms of near-term bookings, or if this is a multi-year ramp that won't show up in fiscal 2027 revenue. The warrant vesting schedule suggests the bulk of the deal kicks in after Q3 2027, so guidance commentary will matter more than the current quarter's numbers.

• Whether Broadcom stabilizes ahead of its September earnings - or if the market prices in a structural loss of Google TPU share

• How Alphabet frames its custom silicon strategy on its next earnings call - specifically, whether it confirms a multi-vendor approach or signals that this is a one-time adjustment

• Revenue milestones in Marvell's fiscal 2027–2033 period - each $500 million tranche unlocks more warrant shares, so execution risk is tied directly to Google's equity position