Nvidia is investing $2 billion in chipmaker Marvell. Its shares are up more than 11%

Shares of chip maker Marvell Technology jumped more than 11% on the premarket on March 31 after Nvidia announced plans to invest $2 billion in the company.

The deal will connect Marvell to its infrastructure for developing and operating artificial intelligence systems, as well as radio access network (RAN) solutions. Marvell will supply custom chips and networking solutions compatible with Nvidia's NVLink Fusion platform, while Nvidia will provide related technologies including CPUs, NICs and interconnects. The companies will also jointly develop silicon photonics technologies and telecommunications networks, the release said.

Silicon photonics can speed up data transfer and reduce power consumption - key areas for data centers that use huge amounts of energy, Bloomberg explains.

Nvidia shares added 1.4% in the March 31 premarket.

Through the deal, Nvidia expects to maintain a key role in supplying the growing computing needs of AI services - amid some companies switching to its own processors instead of its expensive chips, Reuters notes.

Nvidia has made a string of $2 billion investments in technology companies in recent months. These include investments in chip software developer Synopsys, cloud computing provider CoreWeave, optoelectronics company Coherent and optical components maker Lumentum. On March 11, Nvidia invested $2 billion in Nebius Group, Arkady Volozh's cloud AI company. On March 31, Nebius announced plans to build one of the largest data centers in Europe.

Marvell is one of the key beneficiaries of the boom around artificial intelligence. The company's shares rose 22% in March amid a broad market downturn after it announced a strong outlook earlier this month. The chipmaker expects its revenue in fiscal 2028, which begins in January, to grow nearly 40% to close to $15 billion.

This article was AI-translated and verified by a human editor