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

Shares of Marvell rose nearly 7% on Tuesday, while shares of Nvidia gained 2.7%.

With the deal, Nvidia aims to ensure it remains central to meeting the growing computing needs necessitated by AI tools at a time when some companies are opting for custom processors over its expensive processors.

“Nvidia Marvell’s semi-custom silicon and advanced optical interconnect capabilities help scale data center-level AI systems where bandwidth and power efficiency are key constraints,” said Jacob Bourne, an analyst at EMarketer.

“It also expands Nvidia’s ecosystem to include more specialized silicon, helping Nvidia remain a key access point for increasingly diverse AI workloads.”

“Investors will see the deal as reducing friction as it allows AI chips from other suppliers to work in Nvidia-dominated data centers. So Nvidia can maintain its dominant position while expanding the scope and utility of the AI ​​semiconductor sector,” Bourne added.

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

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

Big tech companies including Alphabet and Meta are expected to spend at least $630 billion this year building AI infrastructure, boosting demand for chips used in servers and networking equipment and benefiting companies like Marvel.

Marvel has said it expects revenue to grow nearly 40% in fiscal 2028 and approach $15 billion.