Shares of Broadcom slid 4.3% to $363.63 Wednesday after rival Marvell Technology formalized a sweeping custom-chip partnership with Google — the same client that anchors Broadcom's AI growth story. Marvell and Google announced an expanded chip-development deal, including a warrant allowing Google to buy as much as $12.2 billion in Marvell shares.

Marvell jumped more than 12% in premarket trading , while Broadcom fell into a five-day slide that has now erased roughly $54 per share, or 13%, since August 12.

  • Google Is Splitting Its Chip Orders — And That Changes Broadcom's Math. Until now, Google relied on Broadcom for the design of its in-house Tensor Processing Units.

The new Marvell agreement covers AI inference accelerators, storage controllers, network interface controllers, and near-memory compute — products that overlap directly with Broadcom's offering. Broadcom is targeting $100 billion in AI chip revenue by 2027, a goal that depends heavily on sustained Google TPU volumes. Any revenue that migrates to Marvell pressures that target.

  • The Warrant Structure Locks Google In For Years. Google may purchase up to nearly 59 million Marvell shares at $206.58 apiece, vesting in 240 tranches through fiscal 2033, with each tranche tied to $500 million in custom-chip revenue. That means Google is financially incentivized to keep buying from Marvell — the more it spends, the more stock it unlocks. This isn't a one-off purchase order; it's a structural commitment that could channel tens of billions in orders away from Broadcom over the next seven years.

  • Broadcom's Existing Deal Provides a Floor, Not a Ceiling. Broadcom entered a long-term agreement with Google to develop and supply custom TPUs and networking components for next-generation AI racks through 2031. That contract remains intact, and Broadcom carries a $73 billion AI backlog. But a locked contract doesn't prevent a customer from steering incremental spending elsewhere — precisely what Google appears to be doing with Marvell.

  • A Broader Selloff Is Amplifying the Pain. The decline lands amid rising Treasury yields and profit-taking across AI stocks. Broadcom and Marvell together control roughly 95% of the custom-chip design market , so the overall pie is still growing — the custom chip market is projected to grow 45% in 2026 toward $118 billion by 2033. But investors are recalculating whether Broadcom's share of that pie holds steady, or whether Google's supplier diversification becomes a template other tech giants follow.

For shareholders, the core question is straightforward: Broadcom's contracts and scale remain formidable, but its most important customer just handed a rival both a multi-year chip deal and a financial reason to keep deepening the relationship.