Intel Is Paying an Awful Lot for Mobileye

Mar 14, 2017, 00:36
Intel Is Paying an Awful Lot for Mobileye

This is the biggest ever acquisition of a tech firm in Israel.

On Monday's call, Amnon Shashua, a co-founder of Mobileye and its current CTO, said that his company would work with Intel to take advantage of the chip maker's capabilities in the data center, and through that relationship develop better middleware and software for the autonomous vehicle market.

"The addition of Mobileye to our family provides the data path to our computing solutions becoming the intelligent set of eyes that will allow a vehicle to see and define the world around it", said Brian Krzanich, Intel's chief executive, in a letter to employees.

Mobileye is a popular name when it comes to computer vision technology. According to the news release, the acquisition will combine the technologies from both companies "to deliver driving solutions that will transform the automotive industry". The companies put the equity value of the deal at $15.3 billion.

Over the last two years, Intel styled itself like many other chip supplier as a growing force in self-driving cars.

Given that autonomous driving is expected to play a major role in our future it makes sense for Intel to pick up one of the companies that's doing so much work to make that future a reality. It's a weighty sum, but the purchase gives Intel cutting-edge machine learning technology that lies at the center of the nascent autonomous auto industry. It also controls about 70 percent of the market for software that runs automatic emergency braking and semi-autonomous cruise control systems that are in cars and trucks on the road today.

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USA microchip maker Intel is about to be the new company behind the wheel at the driverless technology firm Mobileye.

The merger promises to create the most complete portfolio of technologies needed for driverless vehicles, including cameras, sensor chips, in-car networking, roadway mapping, machine learning and cloud software, as well as the data-centres needed to manage all the data involved.

The deal is expected to be immediately accretive to non-GAAP earnings and free cash flow, and the combined company hopes to generate $175 million in annual cost synergies by 2019.

In March 2013, Shashua gave then-President Barack Obama a demonstration of Mobileye's technology.

Earlier, Intel and Mobileye teamed up with BMW AG with plans to introduce fully autonomous cars by 2021.