Nvidia is acquiring a $2 billion stake in Marvell Technology Inc. and is opening up its system to allow Marvell to integrate specially designed AI chips and networking equipment into its platform.
Nvidia, which has invested billions of dollars in companies across the AI supply chain in recent years, has also agreed with Marvell to collaborate on developing silicon photonic circuit technologies, which use light instead of traditional copper wires to transmit data faster and more efficiently. The two companies will also work on developing better ways to leverage communication networks for AI-powered computing, according to a statement released Tuesday.
Marvell shares jumped 13% to $99.05 in New York on Tuesday, their biggest intraday gain in more than three weeks. Nvidia shares also rose 5.6% to $174.4.
Marvell sought to establish itself to capitalize on the AI spending boom. While it helped cloud computing companies like Amazon.com design custom chips for AI applications, these products are not as widely available as Nvidia processors. The company has benefited more from supplying infrastructure within data centers that rely on networking chips like those produced by Nvidia.
Enhancing the NVIDIA ecosystem
Nvidia’s stake and partnership with Marvell reinforce efforts the company announced last year to open its ecosystem to some competitors. In May, CEO Jensen Huang said the company would grant access to its AI servers to enable several partners, including Marvell, to deploy custom chips for their customers within data centers. Just a few months earlier, Marvell reassured investors that its custom chip design unit was winning repeat orders and offered strong sales growth forecasts.
In contrast, silicon photonic circuit technologies have the potential to scale AI infrastructure by accelerating data transfer while consuming less power, thus mitigating the enormous energy consumption of AI tools like OpenAI’s ChatGPT and Anthropic’s Cloud. In December, Marvell announced its acquisition of Celestial AI, a Santa Clara, California-based startup focused on this technology.
When asked about the unusual nature of one chipmaker investing in another, Marvel CEO Matt Murphy said in an interview with CNBC that he does not see it as a zero-sum game, adding that companies like Nvidia and Marvel are working together to build and expand the entire market for their products.
Huang also said in the company statement that working with Marvell allows its customers to better leverage Nvidia's AI infrastructure ecosystem.
