By on March 13, 2017

central processing unit computer parts

After collaborating with Mobileye to help BMW put a fleet of roughly 40 self-driving test units on the road before the end of this year, Intel has decided that it would rather just buy the cow. The acquisition of autonomous driving technology leader Mobileye is going to cost the computing giant a colossal $15.3 billion.

More specifically, an Intel subsidiary will offer $63.54 per share for all issued and outstanding shares, which carries an equity value of $15.3 billion and an enterprise value of $14.7 billion. No matter how you slice it, it’s the world’s largest purchase of a company solely focused on the autonomous driving sector. The motivation is clear. Mobileye accounts for around 70 percent of the global market for modern driving aides, anti-collision systems, and advanced autonomous safety. 

“This acquisition is a great step forward for our shareholders, the automotive industry and consumers,” said Brian Krzanich, Intel CEO, in a statement. “Intel provides critical foundational technologies for autonomous driving including plotting the car’s path and making real-time driving decisions. Mobileye brings the industry’s best automotive-grade computer vision and strong momentum with automakers and suppliers. Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers.”

For the last decade, Mobileye has outsourced chips from STMicroelectronics, which the Israeli company then sells to many of the world’s largest automakers for use in driver-assistance and safety systems. It’s a fair assumption that it will exclusively use Intel-sourced silicon in the near future. The company has already developed some for the BMW project, using fifth-generation Intel chips. The aim is to use those in fully autonomous vehicles in 2021, after the test fleet has a few years of testing under its belt.

Intel said it expects to close on the deal within the next nine months.

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15 Comments on “Intel Scoops Up Autonomous Tech Company Mobileye for a Whopping $15.3 Billion...”

  • avatar

    What a ludicrous amount of money for something so tenuous in tangible value. This reminds me of the dot com bubble where everything was overrated, overestimated and overvalued. The prices that get thrown around for garbage like this and social media outlets is asinine.

    • 0 avatar

      A company with a 70-percent marketshare in an increasingly-important automobile system is nothing to sneeze at; it’s certainly not some intangible fad like the latest video-sharing app or terrible cell-phone game.

      • 0 avatar

        I can appreciate where you’re coming from. However, it appears that the technology isn’t even half-baked for prime time yet. The public is, at best, sort of clueless about it and, at worst, afraid and non-receptive to it. I’m probably wrong and will end up labeled as the “youngest old man yelling at a cloud” but I think it’s largely vaporware and a dead end. But time may prove me wrong.

        • 0 avatar

          “I think it’s largely vaporware and a dead end.”

          Based on what?

          • 0 avatar

            I could do a 30 second search and provide at least a couple articles supporting what I’m saying if necessary. Beyond that, I think the burden of proof lies at the feet of the industry trying to innovate and change the status quo. Even if they do get everything right, public opinion and federal regulation will impede any progress or ensure that what comes out on the other side is a mere shadow of what was intended. You can mark my words on that. We’ve all seen enough examples of the power of the media machine to shape public reception to the automotive industry, I shouldn’t have to cite them.

          • 0 avatar

            “federal regulation will impede any progress”

            They are 100% in favor of self driving cars.

        • 0 avatar

          “Isn’t even half-baked for primetime yet.” Huh? MobilEye’s systems (or others like it) are present in a huge percentage of vehicles shipping today. It’s not “vaporware” at all.

          Perhaps you are under the misunderstanding they are a fly-by-night company like that from a few months back; they are not. They are a major supplier for the “driver assist” systems used by quite a few automakers to provide Adaptive Cruise, Lane Keeping, Anti-collision braking, etc.

    • 0 avatar

      This is Intel, the same company that spent billions on Netburst and then casually dumped it when they developed something better. This doesn’t surprise me at all.

  • avatar

    As the B&B are no doubt aware, self driving cars, like heavier than air flight, will forever remain impossible.

  • avatar

    Good news; meatless driving will be further nudged toward fruition.

    I’m just resigned to having no meat left on my bones by the time that happens.

  • avatar
    DC Bruce

    In other news, the price of Intel’s stock is off today . . . From Intel’s perspective, there’s a great need to find or develop a market for its core expertise (chip design and fabrication) to replace the fairly static personal computer market.
    So, this might be one of them.

    As I understand it, the acquired company is at the heart of a lot of less-than-self-driving technologies that already are commercially available, such as adaptive cruise control, lane departure warning and so on. So, it’s not in the vaporware business.

    Some people like that stuff. My truck has everything but adaptive cruise, and that’s the one “advanced technology” I wished the truck had (although I have no experience with it). The “you’re going to crash into the vehicle in front of you” alarm (which is not connected to the brakes) falses a sufficient number of times that I would hate to imagine it being connected to the vehicle’s braking system. And by “falses,” I mean that it goes off without any visible obstacle in front, not that it goes off when I have plenty of time to stop. That part you can adjust.

    • 0 avatar

      My experience with a Mobileye 560 aftermarket system differs from your oem setup. The forward collision warning, in both distance and traffic jam modes is impressively accurate. On rare occasions it false alarms on tight corners with parked cars on the right or oncoming cars on the left. But this is predictable.

      The lane departure warning also works anazingly well, even in the dark in rain. Snow doesn’t faze it unless the lane lines are completely invisible. Then it goes into the same state as on gravel roads.

      This performance is not good enough to be allowed to control the throttle, steering or brakes. But there is no question it works.

      And should the various opponents of such sustems get tired of being stuck in huge traffic jams on busy arteries because some idiot rear ended someone else, then they might reconsider the value of these systems.

      Hopefully two consequences of Intel ownership will be lower cost for Mobileye aftermarket systems and promotion to get wider retrofitting of older cars.

  • avatar

    I can remember when Mobileye came to the SAE World Congress to show off their camera and software based driver assist systems maybe 10 years ago. They were having a hard time getting past the auto industry’s then reliance on IR, radar and other sensor based systems. As a matter of fact, besides going after OEM sales, part of their business plan was selling aftermarket units to parents of teenagers.

    However, they proved that their software worked and are pretty well established as an OEM supplier these days. When they went public in 2014, their IPO was the largest by any Israeli company to date. Before the Intel announcement, Mobileye stock was trading at ~$42/share, giving the company a market cap of about $9 billion. Since the Intel announcement, the stock is up about 30%, so investors seem to think that Intel isn’t making a foolish decision.

    Mobileye is profitable, has an existing revenue stream, and is well situated to take advantage of the growth in autonomous vehicles.

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