Nvidia bets US$2 billion on Marvell as rising AI adoption fuels competition

Nvidia held its flagship GTC Conference in San Jose, Calif. (Credit: Benjamin Fanjoy/Getty Images via CNN Newsource)

Nvidia has invested US$2 billion in Marvell Technology as part of efforts to make it easier for customers to use the custom artificial intelligence chips that the smaller company designs with Nvidia’s networking gear and central processors.

Shares of Marvell rose more than nine per cent in premarket trading on Tuesday, while Nvidia shares were up 1.5 per cent.

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Through the deal, Nvidia aims to ensure it remains central to meeting the growing computing needs required by AI tools at a time when some companies are opting for custom processors instead of its pricey processors.

“Together with Marvell, we are enabling customers to leverage Nvidia’s AI infrastructure ecosystem and scale to build specialized AI compute,” said Nvidia CEO Jensen Huang.

The companies will work on advanced networking solutions for AI, focusing on optical interconnects and silicon photonics technology, which enables high-speed, energy-efficient data transmission.

Marvell will contribute custom chips and networking solutions compatible with Nvidia’s NVLink Fusion, while the AI chip bellwether will supply supporting technologies including central processing units, network interface cards and interconnects.

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Big Tech firms including Alphabet and Meta are expected to spend at least $630 billion to build AI infrastructure this year, lifting demand for chips used in servers and networking equipment from companies such as Marvell.

Marvell has said it expects revenue to grow nearly 40 per cent and approach $15 billion in fiscal 2028.

(Reporting by Jaspreet Singh and Kritika Lamba in Bengaluru; Editing by Tasim Zahid and Sriraj Kalluvila)