Google Gets Paid In Stock For Buying Chips

On August 19, 2026, Marvell Technology disclosed an expanded custom chip agreement with Google and granted it a warrant to purchase up to 58,970,907 shares at $206.58 apiece, worth roughly $12.2 billion if fully exercised and running until August 18, 2033. The underlying commercial agreement was signed on July 29.

The chips are supporting cast to Google's own silicon. Marvell will develop products that attach to Google's tensor processing unit ecosystem, including AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory compute.

The vesting is where the design lives. About 1.36 million shares vest in equal quarterly installments during the first year, while the remaining shares vest in 240 equal tranches, one for every $500 million in custom product revenue Marvell records from Google purchases, running through fiscal 2033.

In plain terms, Google earns ownership of its supplier by buying from it. Full exercise would make Google Marvell's fifth-largest investor.

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Marvell designs semiconductors for data centers, networking, and storage, and has become a major supplier of custom chips for cloud companies building their own AI infrastructure. Its business depends on winning a small number of enormous customers.

The competitive shift is real. Marvell shares jumped roughly 8% on the news while Broadcom, which had been Google's main custom chip partner, fell more than 5%. As one Morningstar analyst put it, this is a big win for Marvell.

The structure also has precedent. In October, AMD agreed to supply OpenAI with AI chips worth tens of billions in annual revenue while granting the ChatGPT maker an option to buy a stake of up to roughly 10%.

The economics are a rebate in equity. Instead of cutting prices to win volume, Marvell gives Google shares as it spends, so the cost of the discount is dilution rather than margin.

That aligns both sides. Google has a financial reason to keep routing orders to Marvell rather than shopping around, because every $500 million spent converts into stock, which is a stickier lock-in than any contract term.

For Marvell, it buys visibility. A single hyperscaler committed by incentive rather than obligation is what lets a chip designer plan capacity years ahead.

The headline figure is widely repeated and widely misread. Unlocking the full warrant would require roughly $120 billion in qualifying purchases, but that is a vesting threshold, not a spending commitment. Google has agreed to nothing it must buy.

The asymmetry runs one way. If Google's orders come in slower than expected, the stake stays mostly unearned and Marvell loses a main support for its stock; if orders come in fast, existing shareholders absorb dilution. Marvell also remains dependent on a handful of giant customers, Broadcom will fight to win the business back, and Marvell's earnings report on August 27 is the first concrete read on whether orders are actually flowing.

The deal matters because it shows how AI supply chains are now bound together with equity instead of contracts, with customers taking ownership positions in their own suppliers. The real impact depends on how quickly the tranches actually vest, which is a measure of spending, not intent.

Disclosure: This content is for educational and informational purposes only and does not constitute investment advice or recommendations. You should always conduct your own research or consult a qualified financial advisor before making investment decisions.