Marvell Technology Inc (NASDAQ:MRVL) issued Alphabet's Google a warrant to buy up to 58.97 million shares at $206.58 apiece, expanding a custom chip partnership between the two companies.
The warrant would let Google purchase shares equal to roughly 6.7% of Marvell's shares outstanding if fully exercised, a stake worth about $12.2 billion at the strike price.
Marvell shares rose nearly 9% Wednesday morning.
Most of the warrant vests based on revenue Marvell generates from custom chip work for Google through fiscal 2033, including AI accelerators, networking hardware and memory products. A smaller portion vests gradually over the first year.
Beginning in fiscal third quarter 2027, additional tranches of shares unlock for every $500 million in custom product revenue Marvell books from Google.
The warrant follows a July 29 announcement in which Marvell said it would expand its work on Google's AI infrastructure to include AI inference chips, storage controllers, networking hardware, memory controllers and near-memory compute products.
The structure ties Google's potential equity stake directly to the commercial success of the partnership, giving both companies incentive to grow the custom chip business together.