Published: Tue, March 14, 2017
Tech | By Constance Martin

Intel buys Mobileye to boost self-driving auto efforts

Intel buys Mobileye to boost self-driving auto efforts

The entire deal has an estimated equity value of $15.3 billion, and enterprise value of $14.7 billion.

Intel is serious about becoming an important player in the self-driving vehicle market. The company has a market cap of $13.49 billion, a PE ratio of 132.22 and a beta of 0.97. 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. "If it had been an OEM, some other vehicle companies would have cut ties with Mobileye", Volkow told Ars. The boards of both companies still have to approve the transaction. Professor Amnon Shashua, who is one of Mobileye's co-founders and now serves as Chairman and CTO of the company, will lead this new division within Intel.

"By pooling together our infrastructure and resources, we can enhance and accelerate our combined know-how in the areas of mapping, virtual driving, simulators, development tool chains, hardware, data centers and high-performance computing platforms", he added in a statement.

In its annual report for 2015, Mobileye said its products "were included in serial production vehicle models since 2007".

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Intel, for quite some time, had teamed up with Israel based computer vision firm Mobileye.

Competitors also formed partnerships in 2016. That context also helps explain NVIDIA's lofty valuation, as well as its share gains today, given its own burgeoning autonomous vehicle ambitions. Ford has invested $150 million in laser sensor maker Velodyne, and it recently announced a $1 billion purchase of budding robotics startup Argo AI.

"The deal dramatically proves that the vision which we are leading is being realized", said Prime Minister Benjamin Netanyahu. He said he's been assured that the company's operations will stay in Israel. "We believe this deal can lower costs, and offer faster time to market". "Israel is becoming a global technology center not just in cyber but in the automotive sector as well".

In a call announcing the deal on Monday, Intel CEO Brian Krzanich told financial analysts that the two companies would function separately for nine months until regulators sign off on the acquisition. Mobileye's stock jumped on the news, while Intel's share price took a small, two percent, hit. The shares surged 30 percent to $61.22 on Nasdaq.

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