Most chip suppliers spend years trying to win a single hyperscale customer.

Marvell Technology (MRVL) just deepened its ties with all three of the largest ones, and it did so by giving Google a reason to keep spending.

On August 19, 2026, Marvell disclosed an expanded custom chip agreement with Alphabet's (GOOGL) Google. 

The company also handed Google a warrant, which is a contract that lets the holder buy stock later at a set price.

Marvell stock jumped, but the structure of the deal is what shareholders need to understand. 

Google does not get a cheap stake for free. It has to earn most of it by buying billions of dollars in chips.

That single condition changes how investors should read this news, and it decides whether the deal rewards current stockholders or costs them.

How the Marvell and Google custom chip deal actually works

Marvell agreed to develop a range of custom semiconductors for Google's AI systems.

It issued Google a warrant to buy up to 58.97 million Marvell shares at a fixed price of $206.58, Reuters reported. 

At that price, the full position would be worth about $12.2 billion.

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The warrant does not force Google to invest that money now. Only about 1.4 million shares become available to Google in the first year, according to Marvell's SEC filing.

The rest is tied to spending. 

One block of shares unlocks for every $500 million in custom chip revenue Marvell books from Google, running from the third quarter of fiscal 2027 through fiscal 2033.

To unlock the whole stake, Google would need to buy roughly $120 billion in Marvell products over that stretch, Reuters reported. 

Google can exercise the warrant until August 18, 2033.

Why Marvell stock jumped on the Google agreement

Marvell shares rose sharply on the news of the deal, gaining roughly 10% on August 19 and closing near $234, CNBC reported.

Investors reacted to what the deal signals about Marvell's position. 

Google has relied mainly on Broadcom (AVGO) to co-design its Tensor Processing Units, the custom chips that run much of its AI work.

This agreement adds Marvell as a second major supplier inside that system. 

Marvell already builds custom silicon for Amazon (AMZN) and Microsoft (MSFT), so the Google deal gives it a foothold with all three of the biggest US cloud providers.

Broadcom shares fell about 4% to 5% the same day as investors considered the new competition.