Shares of Marvell Technology Inc. increased in trading on Monday following a media report that the semiconductor company is in discussions with Alphabet Inc.’s Google to develop two new custom artificial intelligence chips.
The report, first published by The Information and subsequently cited by Reuters on June 3, 2024, detailed that the potential collaboration would focus on producing chips designed to improve the efficiency of running AI models. Following the news, Marvell’s stock (MRVL) rose approximately 7% in premarket trading. The company’s shares closed the trading day up 4.8%.
According to the initial report, the talks between the two technology companies are ongoing. Marvell Technology and Google did not immediately respond to requests for official comment on the matter.
The reported discussions align with a broader industry trend of major technology firms seeking to develop custom silicon for their AI workloads. Companies are investing in application-specific integrated circuits (ASICs) to optimize performance for their proprietary software and reduce reliance on third-party chip suppliers. Google has been a key participant in this area for several years, having developed multiple generations of its own Tensor Processing Units (TPUs) to power its AI services, including search and cloud computing platforms.
A partnership with Marvell would represent a continuation of Google’s strategy to expand its custom hardware capabilities. Marvell Technology is a designer and manufacturer of semiconductors for data infrastructure, with products focused on data center, carrier, automotive, and enterprise networking markets. The company provides custom chip design services, which allows clients to create hardware tailored to specific applications.
The market for AI chips is currently experiencing high demand, driven by the rapid expansion of large language models and other generative AI technologies. These systems require significant computational power for both training and inference tasks. This has led to increased investment and competition among semiconductor firms and the large technology companies that are their primary customers. The development of specialized chips is seen as a key factor in managing the substantial energy and operational costs associated with large-scale AI deployment.
