Google's $12.2B Marvell warrant prices customer loyalty at about 10 cents per order dollar

The $12.2 billion is not an investment Google made. It is the strike cost of a warrant Marvell disclosed in a Wednesday regulatory filing, giving Alphabet the right to buy up to 58,970,907 Marvell shares at $206.58 each ^[1]. Fully exercised, that is $12.18 billion and would make Google Marvell's fifth-largest investor ^[2].

What matters is the vesting mechanism. The first 1.36 million shares vest in equal quarterly instalments over the first year ^[3]. Everything after that vests between fiscal 2027 and fiscal 2033 in 240 tranches, one released for each $500 million of custom products Google purchases ^[4]. Multiply it out and the warrant is fully earned only against roughly $120 billion of orders ^[5], which matches the revenue Marvell's deal could produce through fiscal 2033 if Google hits the targets, according to reporting on the filing ^[6]. Each tranche works out to about 240,000 shares, or roughly $49.6 million at the strike price: close to 10% of every $500 million order, paid in equity rather than discount ^[7].

That is the structural change. Bernstein's Stacy Rasgon noted Broadcom granted no warrants in either its Google or its Meta custom-chip deals ^[11], and Broadcom said in April it was extending its Google partnership through 2031 ^[12]. Broadcom fell 4.6% on the news while Marvell rose about 10% ^[8][9]. D.A. Davidson's Gil Luria said the stake is a bad sign for Broadcom because it creates better alignment between Google and Marvell ^[13]; Morningstar's William Kerwin read it as a growing pie rather than displacement ^[14]. Both can be true, and the customer now holds a claim on the supplier's equity either way.

The pattern is spreading: AMD gave OpenAI an option on a stake of up to roughly 10% in October ^[15], and Nvidia agreed to backstop up to $105 billion of an OpenAI data-centre lease in Ohio ^[16].

Watch Broadcom's September earnings for its product and revenue trajectory ^[18], and watch whether Marvell discloses tranche vesting, the only public read on whether the $500 million increments are actually being bought.