Marvell wins Google AI chip deal as Broadcom drops 4.7%

What changed for Broadcom

Marvell Technology landed a major custom AI chip agreement with Alphabet's Google on Wednesday, August 19, and the market read the news primarily as a Broadcom problem. Broadcom (NASDAQ: AVGO) fell about 4.7%, Marvell (NASDAQ: MRVL) rose about 9.9%, and Alphabet (NASDAQ: GOOGL) itself was little changed on the headline. The divergence highlighted how exposed Broadcom's AI business is to a single large customer.

The Marvell warrant and Google chip work

The deal centers on a warrant tied to future revenue rather than an outright equity sale. Marvell granted Google the right to buy up to 58.97 million shares at $206.58 each, worth about $12.2 billion if fully exercised. The warrant vests in stages: roughly 1.4 million shares vest over the first year, and the remaining approximately 57.6 million shares vest in 240 tranches tied to every $500 million of custom-product revenue Google generates for Marvell, running through fiscal 2033. The development work covers AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory compute that attach to Google's tensor processing unit (TPU) ecosystem rather than replacing it. Full vesting would imply around $120 billion in cumulative Marvell sales to Google over the period, a threshold rather than a guaranteed spending commitment, and would make Google Marvell's fifth-largest investor.

Broadcom's existing Google position

Broadcom has been Google's principal custom-silicon partner across multiple TPU generations and signed a long-term agreement in April to supply future generations and rack hardware through 2031. That agreement remains in force. What the Marvell announcement changed is the market's view of Broadcom's assumed exclusivity inside Google's most important silicon program: Google now has a second serious supplier, and investors repriced Broadcom accordingly. Marvell has outrun Broadcom and the broader chip index over the past year, and the Google deal widened that performance gap further.

Broader chip-sector reaction

The same session saw chip-stock selling pressure beyond the Marvell-Broadcom pair, with Intel slipping and AMD easing as the custom-AI-chip landscape shifted. The deal followed the template AMD used with OpenAI, in which a large customer received equity upside in exchange for locking in a multi-year chip supply relationship.

Other developments

Separately, ARK Invest launched a new autocallable ETF tracking its other funds, with positions disclosed including Broadcom, Rocket Lab, and Cloudflare.

What remains uncertain

It is unclear how quickly Marvell's Google-attached products will ramp, what share of Google's TPU-related custom silicon spending will migrate from Broadcom to Marvell, and whether the warrant's revenue-linked tranches will vest in full or in part given the fiscal 2033 horizon.