Intel has muscled its way into the yet-to-be-profitable driverless car market with a $15.3 billion acquisition of a sensor-making company:
The likes of Google and Uber already have invested billions of dollars in their own technology, signing partnerships with automakers like Chrysler and Volvo and sending test vehicles onto the road in a bid to cement their place in the industry, which is estimated to be worth $25 billion annually by 2025, according to Bain & Company, the consultancy firm.
But by acquiring Mobileye, whose digital vision technology allows autonomous vehicles to safely navigate city streets, Intel aims to provide a complete package of digital services, looking to supply to automakers that want to offer autonomous driving, but which do not want to rely on the likes of Google for such services. "Scale is going to win in this market," Brian Krzanich, Intel's chief executive, told investors on Monday. "I don't believe that every carmaker can invest to do independent development into autonomous cars."
Bloomberg has this analysis:
To the non-tech crowd on Wall Street, a bet of this scale by an industry stalwart such as Intel serves to validate the growth strategy, even if the payoff is years down the road. But it's also a reminder that enthusiasm for self-driving cars is making chip companies go crazy. At this point, it's hard to gauge how big a movement autonomous cars will become, nor how it will affect companies that participate in the technology. Mobileye's automotive imaging technology, for example, is being tested by car makers such as BMW, but you can bet the tech superpowers developing driverless cars will cook up the key components on their own, as Google parent company Alphabet Inc. and Uber Technologies Inc. are doing. The more the tech industry heavyweights rely on self-built components, the more that threatens to cut Mobileye out of the self-driving future -- or at least slash prices for Mobileye components. The self-driving auto unit of Alphabet claims to be pushing down the prices for the imaging technology that maps the surroundings of autonomous cars. That can't be good for Mobileye's ability to maintain its 75 percent gross profit margins.
Also at Reuters, AnandTech, and Nasdaq.
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Intel has completed its acquisition of Mobileye, and is planning to build a fleet of 100 "Level 4" autonomous vehicles:
Fresh off its acquisition of auto-visual company Mobileye, Intel announced today that it will build a fleet of Level 4, fully self-driving vehicles for testing in the US, Israel, and Europe. The first vehicles will hit the road later this year, and the fleet will eventually scale to more than 100 automobiles.
The cars will be Level 4 autonomous, meaning that they will be capable of handing most driving situations themselves, whereas Level 5 is largely theoretical and covers complete automation in any condition.
Intel announced plans to acquire Israel-based Mobileye for $15.3 billion back in March. That deal just closed on Tuesday, spurring the chipmaker to begin making aggressive moves in the emerging self-driving market that Intel itself predicted will come to be worth over $7 trillion. Intel previously said it will spend $250 million over the next two years on the development of autonomous vehicles.
Also at Intel Newsroom.
Intel plans to take self-driving car unit public in the U.S. in mid-2022
Intel has announced that it plans to list Mobileye, the Israeli autonomous driving firm it acquired for $15.3 billion in 2017, as part of an effort to branch out into new markets.
The Santa Clara chip manufacturer said Monday that it plans to take Mobileye public in the U.S. in mid-2022 via an initial public offering of newly issued Mobileye stock. The IPO could value Mobileye at more than $50 billion, according to some reports.
Intel, whose share price has fallen from $68 in April to less than $50 in December, said the listing will create value for Intel shareholders. It added that it will remain the majority shareholder of Mobileye.
Intel CEO Pat Gelsinger hailed the acquisition of Mobileye as a success, adding that Mobileye's revenue will be 40% higher in 2021 than it was in 2020.
Intel CEO aims to build chip plants with money raised from Mobileye IPO
Gelsinger said Intel will retain a majority stake in Mobileye and will also receive "the majority of the proceeds" from the IPO. He declined to specify the size of the stake that would be sold or a fundraising target, but said that "certainly it will be helpful in our overall aggressive buildout of plants."
Intel has said it plans to build two chip plants in Arizona, and add other plants in the United States and Europe at sites that have not been announced.
Previously: Intel Buys Driverless Car Sensor Company Mobileye for $15.3 Billion
(Score: 3, Funny) by Ethanol-fueled on Wednesday March 15 2017, @11:32PM (3 children)
But then again I am biased because I work for Boston Dynamics' wireless applications division, which collaborates closely with Alphabet's Waymo (autonomous vehicle) [waymo.com] division for sensor work.
Waymo was formerly known as "the Google self-driving car project" but eventually Alphabet decided it needed a cute code name. Once during a systems integration trip to the self-driving car guys we all went out to happy hour afterward and tried brainstorming code names over a few beers. When the topic of their competitors in the self-driving market came up Tyrone Jenkins, a Black engineer, said, " Sheeeeit. We is way mo' betta than dey iz. "
Like that, the name stuck...and other than a few insiders and now you all, the public and management have no clue.
(Score: 3, Touché) by takyon on Wednesday March 15 2017, @11:39PM (1 child)
You lost me at Tyrone Jenkins.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 0) by Anonymous Coward on Thursday March 16 2017, @03:17AM
I lost it at "sheeeit".
(Score: 2) by gidds on Thursday March 16 2017, @01:21PM
That would make… ‘Mossadobileye’.
Er, is that a dance or something?
[sig redacted]