This week, two of the biggest names in AI chips leaned on a strategy investors call vendor financing — quietly helping pay for their own sales.
On August 18, Marvell gave Google a warrant — the right to buy up to 58.97 million Marvell shares, worth as much as $12.2 billion — as part of a custom chip partnership. Marvell’s stock jumped as much as 14% on the news. But almost none of that stake is free. Roughly 98% of it only unlocks in $500 million chunks, each tied to Google actually buying that much in Marvell chips. Only about 1.4 million shares vest just for showing up in year one.
About a week earlier, Nvidia set up something similar on a much bigger scale: a financing network with firms like Apollo, BlackRock, and Goldman Sachs to funnel over $500 billion to Nvidia’s own customers — money they can then use to buy more Nvidia chips.
Picture a car dealership offering to lend you the cash to buy a car from that same dealership. You “bought” a car, the dealership “sold” a car, and on paper both sides look like they had a great month. But no new money entered the system from outside — it just moved in a circle, from the seller’s balance sheet to the buyer’s hand and back to the seller’s cash register. That’s vendor financing.
Marvell isn’t lending Google cash directly — it’s lending Google upside. Google’s incentive to keep buying Marvell chips grows because doing so unlocks more of a stake that was already worth about $30 above its exercise price on day one. Revenue and stock price start reinforcing each other inside the same contract, which makes it harder for an outside observer to tell how much of the “demand” is organic.
None of this means the deal is fake. Marvell’s rival Broadcom lost roughly $87 billion in market value the same day, which suggests the market believes Google’s spending is genuinely shifting toward Marvell. But vendor financing is a pattern worth recognizing whenever a supplier’s numbers and a customer’s numbers start moving in lockstep for reasons that trace back to the same deal.
A different kind of creative financing showed up recently in SoftBank’s stake in OpenAI — borrowing against shares instead of lending revenue. Different mechanism, same underlying question: when a deal gets this creative, whose money is actually doing the work?
My take: Revenue didn’t grow here — the seller just financed its own purchase.
Not advice. Just how I see it.