Marvell(MRVL 0.00%↑) Technology will help Google(GOOG 0.00%↑) develop much-needed custom chips, giving the tech giant the option to become one of its largest investors through an equity investment of up to $12.2 billion—the latest move by Google to capitalize on the AI boom.
Shares of the chipmaker surged more than 11% in premarket trading, while those of larger rival Broadcom—the primary custom-chip partner of Google’s parent Alphabet—fell more than 2%.
Demand for proprietary chips such as Google’s Tensor Processing Units (TPUs) has surged as companies seek cheaper alternatives to Nvidia’s graphics processing units and technologies better suited to inference (the process of running trained AI models).
The new collaboration covers a broad range of chips and related technologies designed to work with Google’s TPU ecosystem, which underpins most of Google’s AI infrastructure.
Under the agreement, Google received a warrant to purchase up to 58.97 million shares of Marvell stock at $206.58 per share.
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