It was less than four months ago that Intel announced it intended to ramp up its ambitions in the realm of self-driving vehicles by targeting $250 million for investments into the nascent technology. At the time, it seemed like a bold move. On Monday, the chipmaker made a much bigger one.
Intel announced it has acquired Mobileye, a major supplier of computer vision and machine-learning systems for the automotive industry, for $15.3 billion. The deal reshapes the race to rake in billions from the advent of self-driving vehicles.
The two companies have worked together in separate partnerships with BMW and Delphi Automotive over the past year, and in doing so realized a closer relationship would bring complementary technologies together under one banner and provide a chance at major inroads into a fledgling marketplace.
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“This acquisition jumps them up the scale and creates a powerhouse of data analytics and cloud services.”
— Tim Dawkins, analyst
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With Intel’s processing capabilities and Mobileye’s ability to extract camera-based telemetry data needed for making high-definition maps from existing collision-avoidance technologies, their combined forces provide potential customers with more pieces of a self-driving system in a single package.
That likely will be an attractive proposition in an overall market that Intel estimates will be worth as much as $70 billion by 2030. And with Mobileye currently maintaining contracts with 27 global OEMs, there’s an opportunity to quickly deliver at a worldwide scale.
For Intel, the deal helps put the company on more equal footing with competitors like Nvidia and Qualcomm.
“Intel was conventionally very strong in the computing and semiconductor industry, but its automotive practice was lacking,” said Tim Dawkins, leader of the autonomous-vehicle practice for global automotive consulting firm SBD. “This acquisition jumps them up the scale and creates a powerhouse of data analytics and cloud services, and now this incredible vision intellectual property.”
Intel CEO Brian Krzanich, center, checks out a car alongside Mobileye chief technology officer Amnon Shashua, partially obscured, at CES in January.
Intel will shift its autonomous-car work to Israel, where Mobileye is headquartered. It’s perhaps unusual that Intel wouldn’t look to relocate its new acquisition near its Silicon Valley home rather than vice versa, but “we don’t want to lose the culture and fast-paced development that Mobileye has been able to deliver,” an Intel spokesperson said.
Those quick efforts have helped Mobileye entrench itself as a market leader in providing software for vision systems found in collision-avoidance technology. That software is already found in more than 15 million vehicles worldwide, and now Intel can process that and feed it back to the cloud.
“All these little pieces of intellectual property are going to become IP that Intel will integrate into its portfolio and allow them to provide many more pieces of the puzzle,” Dawkins said. “In the short term, Mobileye’s conventional business won’t be going away, and this allows them to accelerate their ability to deliver a Level 4 or Level 5 vehicle. That said, I don’t think Intel can start making a car.”
Mobileye co-founder and chief technology officer Amnon Shashua will lead Intel’s autonomous-car efforts and report directly to Intel CEO Brian Krzanich. The deal is expected to take approximately nine months to close.
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