Intel To Buy Tesla’s Former Autopilot Partner For $15.3 Billion

5 months ago by Chris Bruce 15

Intel

Intel buying autonomous tech firm Mobileye for $15.3B

Press conference BMW Group, Intel and Mobileye (from left to right): Klaus Fröhlich, member of the board of BMW AG, Ziv Aviram, Co-founder, President and CEO of Mobileye, Amnon Shashua, Mobileye Co-Founder, Chairman and CTO Professor, Harald Krüger, Chairman of the Board of Management of BMW AG, Brian Krzanich, CEO of Intel, Doug Davis, Senior Vice President and General Manager of the Internet of Things (IoT) Group.

Intel thinks driverless systems are the future, so it’s buying one of the leading sensor makers in the segment.

Intel is buying its autonomous technology partner Mobileye for roughly $15.3 billion as a way to improve the tech giant’s offerings as an autonomous supplier. The deal still requires regulatory approval, but the companies expect to complete the transaction in the next nine months.

Mobileye specializes in autonomous vehicle technology, including computer vision, machine learning, mapping, and data analysis. In its new role, the firm will become part of Intel’s Automated Driving Group, and they’ll look for more opportunities to supply the equipment to automakers. The newly combined division will operate from Israel under the leadership of Mobileye’s Co-Founder Professor Amnon Shashua.

“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.” Intel CEO Brian Krzanich said in the announcement for the merger.

Intel’s acquisition of Mobileye is supposed to expand the computing giant’s role as an automotive supplier. The firm figures future autonomous vehicles could generate 4,000 gigabytes of data per day, and Intel’s computing tech could have a place in that market. There’s money to make, too. The company figures that vehicle systems, data, and services could be worth $70 billion by 2030.

Even before this announcement, Mobileye and Intel already had an established relationship. For example, the two firms partnered with BMW in 2016 for an undertaking to introduce a fully autonomous vehicle from the German automaker by 2021. At the 2017 Consumer Electronics Show, they showed a functioning prototype of the system.

Mobileye also supplies its processors to Audi for the company’s assistance systems. Tesla was among the firm’s clients, too.

Source: Intel and Mobileye via Business Insider

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15 responses to "Intel To Buy Tesla’s Former Autopilot Partner For $15.3 Billion"

  1. MTN Ranger says:

    That is surprisingly more pricey than I expected. However, I’m not surprised by consolidation in startups with EV / self driving / car sharing technology. Look for the big players to be “stocking” up in these growth sectors.

    1. realistic says:

      Is it really that “pricey” for a company with as many synergies (REAL structural and operational synergies, not imagined ones) as the purchaser? I agree that the multiple is high but it’s not insanely out of line. Plus the company has very much turned the corner in solid earnings growth and cash generation.

      As for “EV technology” consolidations of significance: notwithstanding Bosch buying Seeo, some small Continental acquisitions, Daimler picking up share of LiTec and other bits from Evonik, etc., I am not seeing what you are. In fact, post-GM experience with Envia it seems like the majors are kind of skittish about these relationships (on the propulsion/evergy side; in autonomy and ride share it’s been drunken sailor spending on stuff like Cruise and Lyft).

      1. cmina says:

        “Is it really that pricey for a company with as many synergies as the purchaser?”

        Well, those synergies are kinda’ biting them in the ass otherwise they wouldn’t just open up their foundry business to third parties, fire over 10% of their workforce, shutdown projects like the Atom line after pouring billions into it ..

  2. Mister G says:

    Soon Intel stickers will come on EVs.

    1. Brian says:

      In 10 years when you get into a self driving car, there’s a good chance there will be an “Intel Inside” logo as an animation when you start the car 🙂

  3. Seuthès says:

    Too expensive.

    1. wavelet says:

      It does sound expensive… I assume part of the price is to prevent someone else from buying them (e.g., Samsung, NVIDIA).

      The rest of it is that Intel is actually late on this… It hasn’t done well in the cheaper CPU market (for phones, IoT etc.) despite huge investment, and cars are one of the remaining large markets, which is just about to take off.

      If they started from scratch now, or from a small startup, they’d need to spend 3-4 years until they had a product, and even then, they wouldn’t have a customer base or actual road data — MobileEye already has plenty of both.

  4. speculawyer says:

    Intel really wanted in on the autopilot market since it will be a HUGE growth sector for high-end processors.

  5. pjwood1 says:

    Mobileye may have gotten an intrinsic boost from Tesla’s AP2 not fully replacing the abilities of AP1 (Mobileye), at higher speeds.

    1. trololo says:

      Mobileye has been dropped by Tesla because they think they can do a better job inhouse.
      If Tesla is right, and the last autopilot demo video tend to prove they are, we will soon see a far better autopilot, without Mobileye.
      Intel has just bought the future Mobileye revenue with all its partner.

  6. V2 says:

    Intel is the company that paid $7.7B for McAfee some 6-7 years ago just to run it aground. Monopolies have plenty of money to burn and Mobileye is worth its price more than McAfee.

    1. needa says:

      I don’t think of Intel as a monopoly. They have too much competition. Competition that is seriously kicking their bungs to boot.

    2. cmina says:

      “Intel is the company that paid $7.7B for McAfee just to run it aground.”

      ^^

      “McAfee delivers software security solutions, and Intel acquired it for $7.7 billion with the intention to bring security to the silicon level. However, it failed to do so, and McAfee continued to deliver strong earnings from its standalone business under the ISecG (Intel Security Group).

      As seen from the chart above, ISecG’s revenue remained flat at $537 million in fiscal 1Q16, while its operating profit rose 7.6% in fiscal 1Q16, 14% in fiscal 2Q16, and 18.5% in fiscal 3Q16 on a sequential basis. The profit growth rate is increasing with every quarter while revenues remain flat. This trend is likely to continue in fiscal 4Q16 as well.

      For fiscal 4Q16, ISecG revenue is likely to remain flat at $537 million, but operating profit is likely to grow by around 20% or above on a sequential basis.”

  7. PK says:

    For that kind of money I know I could assemble a team to could create AP3 for Tesla.

    1. AlphaEdge says:

      AP2 is Tesla’s.

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