Marvell Technology's shares surged about 7% during premarket trading on Monday after reports emerged that Google is in talks with the chip designer to develop two dedicated processors for AI workloads.
According to a report by The Information that cited two people with direct knowledge of the discussions, the potential collaboration would involve two distinct designs: a memory processing unit intended to complement Google’s existing tensor processing unit - or TPU - and a separate TPU tailored for running AI models.
The discussions come as major technology companies increasingly push to expand their in-house chip programs and lessen dependence on outside silicon vendors. The report indicates that Google - which currently deploys TPUs for both training AI models and for inferencing, the process of responding to user queries - has worked with Broadcom on chip design and may be exploring options to diversify from Broadcom as demand for Google-designed chips climbs.
Both Google and Marvell did not immediately respond to requests for comment.
Industry developments cited in the report underscore how cloud and AI service providers are seeking alternatives to expensive, widely used GPUs. AI-focused organizations and labs are using a mix of processors to develop and run large language models and related applications. For example, the AI developer Anthropic uses a range of chips, including TPUs designed by Google, to build and operate its AI software and the Claude chatbot.
Separately, Meta recently extended its agreement with Broadcom to produce several generations of custom AI processors. The social media company paid Broadcom $2.3 billion last year for AI chip design and related services.
Both Marvell and Broadcom offer clients chip-design assistance, a service that has seen growing demand as AI adoption increases and data centers require specialized processors for intensive workloads.
On valuation metrics referenced in the report, Marvell trades at 33.35 times the estimates of its earnings for the next 12 months, compared with 27.84 for Broadcom. Data compiled by LSEG shows the average analyst rating across 44 analysts covering Marvell is "buy," with a median price target of $125.
If the premarket gains hold, Marvell would add more than $9 billion to a market value cited in the report of $122.15 billion.
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