Alphabet Expands Custom Silicon Deal With Marvell Technology in AI Push

Marvell Technology Inc. has expanded its custom silicon partnership with Alphabet Inc. to supply hardware for Google's Tensor Processing Unit ecosystem, providing additional momentum to Nvidia CEO Jensen Huang’s June forecast that Marvell could eventually become a trillion-dollar company, as first reported by Yahoo Finance.

Under details disclosed on August 19, Marvell will supply specialized hardware across Google's TPU infrastructure. The expanded scope covers artificial intelligence inference accelerators, storage controllers, network-interface controllers, memory-interface controllers, and near-memory computing components.

As part of the agreement, Google was issued warrants to purchase up to 58.97 million shares of Marvell common stock at an exercise price of $206.58 per share, representing a total potential equity transaction of roughly $12.2 billion.

The warrant package is divided into 240 performance-based tranches that vest incrementally. One tranche unlocks for every $500 million in qualifying revenue Marvell recognizes from Google through early 2033. If all tranches are earned, the structure implies approximately $120 billion in cumulative qualifying purchases over the life of the deal.

The partnership reflects accelerating momentum for Marvell in custom compute and network connectivity, following a $2 billion investment made by Nvidia in the company in March. Marvell recently reported record fiscal first-quarter 2027 revenue of $2.42 billion, representing a 28 percent year-over-year increase, and issued second-quarter guidance of $2.7 billion, up roughly 35 percent.

Despite the commercial validation, analysts note that reaching a $1 trillion market value remains a long-term challenge. Financial estimates from Reuters Breakingviews project that a successful deployment with Google could raise Marvell's annual revenue in 2032 from roughly $43 billion to $62 billion. Applying Marvell’s pre-announcement forward revenue multiple of 4.4 times yields an estimated market capitalization of around $270 billion.

The agreement also does not displace existing suppliers. Google continues to partner with Broadcom on custom chips, with Morningstar analyst William Kerwin characterizing the expanded Marvell arrangement as evidence of a growing market overall rather than a vendor replacement.

Institutional investors have recently expanded positions in Marvell, according to second-quarter data compiled by Insider Monkey. The number of hedge fund holders increased to 95 in the second quarter from 79 in the first quarter, with D.E. Shaw raising its stake by 658 percent. Short interest stood at 35.83 million shares as of July 31, representing approximately 4.1 percent of Marvell’s total float.