from the acquiring-stinkeye-next dept.
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 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.