Marvell shares jump 9.8% on Google chip design deal
Marvell Technology Inc. today disclosed that it has won a contract to design artificial intelligence chips for Google LLC.
The deal also extends to other areas. Notably, Marvell has issued a warrant that will enable Google to purchase about 59 million units of common stock. The shares are worth $12.2 billion.
Santa Clara, California-based Marvell is a major supplier of data center chips. Its products can be found in optical networks, storage equipment and the hardware security modules in which companies keep their encryption keys. Marvel also has a sizable custom chip development business.
The company stated in a regular filing today that it will help Google develop custom chips “that attach to the TPU ecosystem.” TPUs, or Tensor Processing Units, are the proprietary AI accelerators that power the search giant’s public cloud.
Marvell stated that one of the partnership’s priorities will be to develop custom inference chips. The company didn’t go into detail. One possibility is that Marvel will help Google develop future iterations of the TPU 8i, an inference-optimized chip that debuted in April.
Large language models keep the information they use to answer prompts in a data structure called a KV cache. The TPU 8i can store the KV cache entirely on-chip, which removes the delays associated with moving it to external memory. Additionally, the chip includes a module called CAE that is optimized to speed up chain-of-thought reasoning workloads.
Google connects its TPU 8i chips to the other hardware in its data centers via a custom network called Jupiter. According to today’s regulatory filing, the company’s chip design deal with Marvell will prioritize the development of custom network interface controllers. Those are devices that optimize the flow of traffic between servers and the network of the host data center.
Marvell will also help Google develop several other chips. The list includes storage controllers and memory interface controllers, which are used to manage storage arrays and RAM devices, respectively. Additionally, Marvell will develop custom near-memory computing devices. Those are accelerators in which logic circuits and memory modules are placed near each other to reduce latency.
Google developed its TPU processor line in partnership with Marvell rival Broadcom Inc. It’s unclear how the new chip deal will affect the VMware parent company. In April, Broadcom announced that it has inked a deal to provide Google with AI accelerators and certain related components through 2031.
The warrant that Marvell issued in connection with the chip deal will enable the search giant to buy shares for $206.58 apiece. The semiconductor supplier’s stock closed at $237 today. An initial $960 million batch of shares is set to vest over the next year, while the remaining $11.4 billion will vest in 240 tranches through fiscal 2033.
Photo: Marvell
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