Gotrade News - Marvell Technology (MRVL) is reportedly in talks with Google (GOOGL) to develop two new AI chips. Marvell shares surged 7% in premarket trading following the report.
The two chips include a memory processing unit (MPU) designed to complement Google's TPU and a next-generation TPU optimized for running AI models. The memory chip design could be finalized as early as next year before entering test production, according to The Information.
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- Key Takeaways
- Google is expanding its AI chip partnerships beyond Broadcom to include Marvell, reducing reliance on Nvidia (NVDA) GPUs
- Big Tech companies are collectively spending $800 billion on data center and AI infrastructure this year
- Marvell jumped 7% premarket, pushing its market cap to approximately $122 billion
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The partnership marks a strategic shift for Google, which has relied primarily on Broadcom (AVGO) for custom chip design. Meta Platforms extended its own Broadcom deal last year, paying $2.3 billion for custom AI processors.
TPU sales have become a major revenue driver for Google Cloud's growth trajectory. In February 2026, Meta reportedly signed a multi-year agreement to lease Google's TPUs for its own AI workloads.
The $800 Billion AI Infrastructure Boom
Big Tech's collective AI spending has reached a record $800 billion in data center infrastructure. Amazon, Microsoft, Google, and Meta are the primary forces behind this unprecedented investment wave.
Nvidia surpassed a $5 trillion market cap in October 2025, while Broadcom crossed $1 trillion in December 2024. These milestones reflect the massive capital markets bet on AI semiconductor demand.
Analyst Sid Choraria of SC Marwar Capital noted that sector valuations are now "a little rich." He attributed the market's strength to two key drivers: AI investment momentum and semiconductor earnings growth.
S&P 500 profits reached $2.1 trillion last year with operating cash flow of approximately $3 trillion. This represents a dramatic rise from $1.2 trillion in 2019 and $600 billion in 2009.
Marvell currently trades at a P/E ratio of 33.35x compared to Broadcom's 27.84x multiple. A consensus of 44 analysts rate the stock a "Buy" with a median price target of $125.
Competition in custom AI chip design is intensifying as Big Tech seeks alternatives to external suppliers. The Google-Marvell partnership could reshape a landscape long dominated by Nvidia and Broadcom.
Sources: Investing.com, Benzinga
